Arab League chief Amr Moussa said on Wednesday that Palestinian President Mahmoud Abbas told him he would not enter indirect talks with Israel.
"The Palestinian president decided he will not enter into those negotiations now ... the Palestinian side is not ready to negotiate under the present circumstances," Moussa told a news conference following an urgent meeting of Arab delegates at the Arab League headquarters in Cairo.
The Arab League, which recently endorsed indirect talks between the Palestinians and Israel, convened on Wednesday an emergency session following Israel's decision to build 1,600 new housing units in east Jerusalem.
The league's Arab peace initiative committee called on Arab foreign ministers to reconsider their support for the talks they extended on March 3.
"In case of the failure to stop the Israeli measures immediately ... the committee concludes that the proposed talks are irrelevant," the committee's statement said.
Secretary-General Moussa cut short his visit to Qatar in order to attend the meeting. Syrian representative to the Arab League, Ambassador Yosef Ahamad said that Israel's decision justifies Damascus' objection to the renewal of negotiations with the Jewish State.
During a joint press conference with Qatari Prime Minister Sheikh Hamad Bin Jassim Bin Jabr al-Thani, Moussa said, "We will study Israel's position and formulate recommendations that will be presented to the ministers and later on to the Arab Summit slated to convene in Libya at the end of the month."
Al-Thani condemned Israel's plan to expand construction around Jerusalem and said that a clear Arab response must be put forth. He added that Israel's position is placing the Arab League's decisions at risk.
"We demand peace with Israel, and demand an immediate peaceful resolution. This is not a warning but an advice for the leaders of Israel," he said.
The construction plan, which was announced during US Vice President Joe Biden's visit to Israel, stirred a diplomatic flurry and embarrassed the Prime Minister's Office.
Biden publicly criticized Israel's decision and said during a news conference with Palestinian President Mahmoud Abbas in Ramallah, "Yesterday the decision by the Israeli government to advance planning for new housing units in east Jerusalem undermines that very trust, the trust that we need right now in order to begin ... profitable negotiations."
Abbas, for his part, urged Israel to commit to the peace process and refrain from taking steps that might impede it.
He had agreed to a proposal to resume the US-mediated negotiations after a 14 month hiatus due to the backing from Arab countries.
"The Palestinians remain committed to peace as a strategic choice on the basis of two states co-existing side by side according to the '67 borders, with Jerusalem as the capital of the Palestinian state," he said.
Roee Nahmias contributed to the story