"I note with regret that Israel has not been in a position to accept an extension of the moratorium as requested by the US, the EU and the Quartet" negotiating the Middle East peace process, Ashton said in a statement.

"The EU position on settlements is clear: they are illegal under international law and an obstacle to peace."

Chief Palestinian negotiator Saeb Erakat is to meet US Secretary of State Hillary Clinton in Washington within "the next 48 hours," Yasser Abed Rabbo, spokesman for Palestinian president Mahmud Abbas, told AFP.

Israeli Defence Minister Ehud Barak was also travelling to Washington for "meetings with senior US defence and administration officials," his office said.

The meetings come a day after Washington admitted that its efforts to coax Israel into imposing new curbs on Jewish settlement construction in the West Bank had failed, leaving direct Israeli-Palestinian peace talks suspended.

"We must spare no effort to get negotiations back on track on all final status issues," Ashton added. "There is no alternative to a negotiated two state solution to the Israeli-Palestinian conflict."

The EU is the biggest single donor to the Palestinian territories.

A US spokesman earlier said Washington was sticking to its goal of reaching a Middle East peace deal "within a year."

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