The Palestine Liberation Organisation is preparing for weekend crisis talks to mull its options after Israel torpedoed the US-sponsored peace talks in response to a Fatah-Hamas reconciliation deal.

With the peace process that US Secretary of State John Kerry has fought long and hard for apparently back to square one just days before an April 29 deadline, both sides were considering their next move.

Israeli Prime Minister Benjamin Netanyahu set the tone, telling the BBC that Palestinian president Mahmud Abbas could “have peace with Israel or a pact with Hamas (but) he can’t have both”.

US President Barack Obama, whose administration dragged both sides back to the negotiating table last July after a three-year hiatus, called the Palestinian unity deal “unhelpful”.

Speaking in Seoul, Obama acknowledged the need for a “pause”, but vowed he would not give up on Kerry’s peace push.

The two sides have been on a collision course since March when Israel refused to release a final batch of Palestinian prisoners in line with the original deal on resuming the talks.

The Palestinians retaliated by applying to adhere to 15 international treaties and then Abbas, who heads the Palestinian Authority (PA) and Fatah, listed conditions for extending the talks beyond the April 29 deadline.

Abbas said he would agree to an extension if Israel freezes settlement construction in the occupied West Bank and annexed east Jerusalem, frees the prisoners and begins discussions on the future borders of a promised Palestinian state.

Israel dismissed these conditions.

At the same time, the Islamist Palestinian movement Hamas and the Fatah-led PLO agreed to establish a “national consensus” government under Abbas within weeks.

The reconciliation deal infuriated Israel whose security cabinet said Thursday it would “not negotiate with a Palestinian government backed by Hamas”.

The PLO leadership is to convene on Saturday in the West Bank city of Ramallah to debate the peace process and its options, with Abbas due to make a key speech on Sunday.