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Palestinian leader Mahmoud Abbas signed ‘State of Palestine’ applications for 15 United Nations agencies.Majdi Mohammed/The Associated Press

A U.S.-hosted overnight meeting between Israeli and Palestinian chief negotiators ended in failure at dawn Thursday morning without an agreement to return to peace talks that began last July.

"Things went badly," said a Palestinian official briefed on the exchange between Tzipi Livni, Israel's Justice Minister, and Saeb Erekat, the long-time Palestinian negotiator. All that was agreed on was that the two sides will remain "in contact" until the April 29 scheduled end of the negotiations.

Hours later Thursday, Ms. Livni said Israel will not free an expected fourth batch of Palestinian prisoners because of the Palestinians' push for recognition at the United Nations.

A statement from Ms. Livni sent to The Associated Press described the Palestinians' decision to seek accessions to 15 international conventions through the U.N. violated the terms set for the prisoners' release. That comes as Palestinian President Mahmoud Abbas described their UN move as a response to Israel's failure to release prisoners as promised at the end of March.

The impasse over the prisoners throws further doubts about the outcome of the U.S.-led peace negotiations helmed by Secretary of State John Kerry.

Ms. Livni told the Palestinian negotiating team that the prisoner release was contingent on the Palestinians refraining from making unilateral moves. Ms. Livni said that "new conditions were established and Israel cannot release the fourth batch of prisoners."

Meanwhile, a report by the Palestinian news agency, Maan, described last night's meeting as "a fierce political battle," one that U.S. envoy Martin Indyk, a former ambassador to Israel, was unable to bring under control. Both the chief negotiators were accompanied by a small group of staff.

Maan quoted Palestinian sources saying that the Israeli side threatened the Palestinians with unprecedented sanctions, after Mr. Erekat declared that his team was representing the occupied state of Palestine as recognized by the United Nations.

An Israeli official told the Haaretz newspaper that Ms. Livni angrily asked the Palestinians why they had signed the documents acceding to some 15 international conventions just hours before the Israeli cabinet was to meet to vote on a prisoner release that had been the source of Palestinian frustration.

Palestinians say they had waited long enough for this particular prisoner release, which had been agreed to last July when the parties also agreed to begin negotiations toward a two-state solution to the Israeli-Palestinian conflict.

In exchange for the release of 104 long-term prisoners, the Palestinians had agreed to postpone their accession to various United Nations and other bodies, a right they have enjoyed since the UN General Assembly recognized Palestine as an Observer State. The fourth and final group of prisoners was to have been released on March 29, but Israel declined to do so, saying it wanted the Palestinians first to agree to extend the negotiations scheduled to wrap up later this month.

The Palestinian official explained that the eight months of negotiations have been one long source of frustration. The assurances given by the United States to the Palestinian leadership under President Mahmoud Abbas have not been fulfilled.

"The Americans told us that the Oslo prisoners would be freed," he said, referring to those in Israeli jails since before the 1993 Oslo Accord, and that there would be "no new construction" in Israeli settlements in the West Bank outside the large blocs that are expected to end up inside Israel in a land swap once the two states are created. Inside those blocs, the official added, there was to be "maximum restraint" when it came to construction.

None of those things came to pass, he said.

Indeed, apart from two recent emergency meetings, the two sides have not even met face to face since early November, he said. Instead, U.S. negotiators have brought the Israeli positions to the Palestinians for consideration, and the Palestinian positions back to the Israelis.

"Believe me, we need these negotiations more than the Israelis," said the Palestinian official. "We're the ones who need an end to the occupation and the creation of our own sovereign state. But there's a limit to how much we will take."

U.S. Secretary of State John Kerry, whose efforts had made the peace talks possible, called on the leadership of both sides to return to full-fledged negotiations.

But he added that it was the Palestinian and Israeli leaders who had to lead from now on. "You can facilitate, you can push, you can nudge, but the parties themselves have to make fundamental decisions and compromises," he said.

With reports from Associated Press