"The discussions failed because of the Israelis, who do not want to apply the Sharm el-Sheikh agreement," Palestinian Civil Affairs Minister Jamil Tarifi told AFP. Under the Israeli-Palestinian Sharm el-Sheikh accord signed in early September, the two sides agreed to open the road through Israel linking the Palestinian territories on October 1, but discussions continued after that deadline, with an Israeli defence ministry official saying earlier Saturday, "We are very close to an agreement, there are only two outstanding points." Tarifi said the two sides had set no date for any resumption of the talks.

Israeli defence ministry spokesman Shlomo Dror also told AFP the two sides had been unable to agree "due to the persistence of disagreements."

``But we are going to continue tonegotiate until we reach agreement,'' he said, adding, ``We had been ready to open this road on Sunday, but we are not really surprised that the Palestinians raised obstacles at the last minute,'' he said. Tarifi said that the main point of disagreement concerned who would hand out the special magnetic cards allowing Palestinians to use the 44-kilometre road.

The Palestinians were demanding that the Israelis give the cards to Palestinian officials who would distribute them to travelling Palestinians upon demand. "We don't want Palestinians waiting for hours for their permits or being interrogated by Shin Beth," the Israeli domestic security service, he said.