CAIRO: Arab League chief Amr Mussa on Monday accused Israel of sabotaging US efforts to restart Middle East peace talks and backed the Palestinian refusal to negotiate until Israel halts settlement activity.

Mussa told AFP he feared Washington's diplomatic push had been brought back "to the starting point" because of Israel's refusal to halt settlement building in the West Bank, a Palestinian precondition for the resumption of talks.

"It has brought us back to the starting point," Mussa, who is in Marrakech for an Arab foreign ministers meeting, told AFP in a phone interview.

"We have clear fears. Israel wants to resume negotiations without preconditions. It wants to remove the issue of Jerusalem (from negotiations), without stopping settlements.

"There are a lot of consultations to see what should be done in the light of the position taken by Palestinian president Mahmud Abbas not to resume negotiations before a halt to settlements, which is sensible and has Arab backing," he said.

Mussa, meanwhile, told the BBC in an interview he feared the US diplomatic efforts were on the verge of failing.

"I'm really afraid that we are about to see a failure. But still wait until we have our meetings and decide what we're going to do. But failure is in the atmosphere all over," he said.

He added that he hoped the US President Barack "Obama administration will not accept this slap on the face and that they will try harder and in a firmer way."

Washington had urged a total halt to new Israeli construction in the West Bank, but on Saturday US Secretary of State Hillary Clinton said Israeli Prime Minister Benjamin Netanyahu's offer to restrict new building, while allowing existing settlements to expand, was "unprecedented."