In a statement released by the Arab League on Friday, the organization placed the onus on Israel if peace talks fail due its policy of "illegal settlement."
The Arab League meeting in the Libyan coastal town of Sirte was to decide if the organization would continue to support the latest round of direct Israeli-Palestinian talks, after Israel allowed a partial 10-month moratorium on settlement construction to expire last month, DPA reported.
The organization's position comes as little surprise, with Arab League chief Amr Moussa saying leading up to the meeting that talks while settlement construction continues would be a "waste of Arab interests."
In the statement released after the meeting, the Arab League reiterated support for a two-state solution. They expressed support for Palestinian unity and called for an end to the Israeli blockade on the Gaza Strip.
The issue of settlement construction, though, was at the top of the six-point list in the Arab League's statement, and is a main stumbling block in the Israeli-Palestinian talks.
Palestinian President Mahmoud Abbas, who was seeking the backing of the Arab League should he decide to pull out of the talks, presented a number of alternative measures to the organization.
It was unknown what those alternatives are or if they would replace direct peace talks, but the Arab League agreed to reconvene within a month to discuss what Abbas had presented.
Palestinian sources said that Abbas told the United States that he would resign as president if settlement construction continued, according to Israeli daily Haaretz.
Egyptian Foreign Minister Ahmed Aboul Gheit has said in recent days that the Palestinians and other Arab states would be willing to take up the matter with the United Nations Security Council if settlement construction continues.
Echoing that sentiment, Moussa said that the Arab League did not fear the possibility of a US veto at the UN body.
"The Palestinians are the ones who are able to establish their own state," Moussa said this week, implying that a unilateral declaration of statehood was still being mulled.
Palestinian Prime Minister Salam Fayyad is in middle of a two-year track to declare a Palestinian state by August 2011.
Fayyad, a former International Monetary Fund official, said that Palestinians would not wait for a peace deal with Israel, and he has moved ahead with reforming the judiciary and planning new cities.
The United States has been pushing the sides to remain at the negotiating table despite their differences, offering incentives to both Israel and the Palestinians that so far have been rejected.