US peace efforts are teetering on the brink of collapse after Israel refused to free a group of 26 veteran Palestinian prisoners under an agreement which brought the sides back to the negotiating table in July 2013.

Furious Palestinian officials have warned that unless Israel changes its stance on the prisoner releases, it could signal the end of the talks.

Kerry’s arrival in Tel Aviv came as the Palestinian leadership was to meet in the West Bank town of Ramallah to discuss the latest stand-off.

The unscheduled visit to Israel and the Palestinian territories came soon after a Palestinian official confirmed Ramallah had rejected an Israeli offer to extend talks beyond an April 29 deadline.

With his work cut out, Kerry is likely to hold meetings in Jerusalem and the West Bank town of Ramallah on Monday and Tuesday.

US State Department spokeswoman Jen Psaki said Kerry’s team had been working with both parties to “agree on a path forward”.

“After consulting with his team, Secretary Kerry decided it would be productive to return to the region,” she told reporters in Paris shortly before departing for Tel Aviv.

Washington has been fighting an uphill battle to coax the two sides into accepting a framework proposal which would extend the negotiations beyond April 29 to the end of the year.

But the question of extending the talks has become intricately tied up with the fate of the 26 prisoners.

Just a day ahead of the expected releases, Israel said it would not free detainees convicted of deadly attacks unless the Palestinians would commit to extending the negotiations.

But the Palestinians say they will not even discuss any extension of the negotiating period unless Israel frees the prisoners.

The impasse has triggered “intense” US efforts to resolve the dispute, with Kerry speaking with both sides earlier on Monday.

Israel’s ‘blackmail policy’ 

Ahead of Kerry’s arrival, a Palestinian official told AFP the leadership had rejected an Israeli proposal to resolve the dispute that was laid out at a meeting of the two negotiating teams in Jerusalem on Sunday night.

“Israel made a proposal which was refused by the Palestinians,” he said.

“Israel is practising a policy of blackmail and linking its agreement to releasing the fourth batch of prisoners with the Palestinians accepting to extend the negotiations,” he said.

In exchange for Palestinian agreement to continue the talks, Israel had offered to free the fourth batch of detainees and to release another 420 others.

But that number would involve only common law criminals and not sick detainees, women or children. And it would not include political heavyweights.

And although the Israelis were offering a partial settlement freeze in the West Bank, it would not be extended to annexed East Jerusalem, nor would it cover construction where tenders had already been published.

“The Israeli proposal aims to continue the negotiations indefinitely, without any results, in parallel with continued settlement building,” he charged, saying such policies posed a “real danger” to the peace process.

On Sunday, Israeli Prime Minister Benjamin Netanyahu said the fate of the US-brokered peace process would likely be sealed within the coming days, telling ministers: “Either the matter will be resolved or it will blow up.”

And he said any deal to extend the negotiations would have to be put to the Cabinet.

Also on Sunday, Kerry said the US would reserve judgement on the issues but that the time to make decisions was at hand.

“We’ll see where we are tomorrow [Monday] when some judgements have to be made,” he said.

It was Kerry’s first visit to Israel and the Palestinian territories since early January, although he has held face-to-face meetings with both Netanyahu and Palestinian leader Mahmoud Abbas in Europe and the United States.

He also met Abbas last week in Amman.