The US-brokered peace negotiations between Israel and the Palestinian Authority have reached an impasse due to an Israeli refusal to discuss land-swap and border issues, an Israeli newspaper reported Sunday.

According to an unnamed, senior foreign diplomat with knowledge of the discussions, during the latest round of talks, the Israeli team of Justice Minister Tzipi Livni and Netanyahu adviser Yitzhak Molcho made it clear to the Palestinians that Israel intends to retain some of the settlement blocs as part of a final agreement, but refused to name which areas or discuss possible compensation to the Palestinians for the territory to be annexed, Maariv reported.

The meeting was held before the Jewish holiday of Rosh Hashanah at the beginning of September.

According to the report, Netanyahu wants a deal under which some settlements will remain under Israel’s jurisdiction but be enclaves within a Palestinian state, a position opposed by Ramallah.

Israeli and Palestinian negotiators have refused to discuss details of the talks publicly.

The Israeli team also reportedly “refused in principle” the idea of a land-swap deal with a 1:1 ratio, an often cited possibility in which Israel would transfer to the Palestinians land adjacent to the West Bank, equivalent in size to the settlements that will become part of Israel in a final status agreement, the report said.

According to the source, the talks will falter unless a face-to-face meeting by Prime Minister Benjamin Netanyahu and PA President Mahmoud Abbas is brokered by the US administration.

At the United Nations General Assembly last week, US Secretary of State John Kerry, who has worked intensively this year on the Israeli-Palestinian negotiations, said the two sides had agreed to an intensified schedule of talks, with more direct US involvement, in an effort to reach a final agreement.

“All of the issues are on the table: territory, security, refugees, Jerusalem – all of the final status issues are on the table,” Kerry said, adding that “we are not seeking an interim agreement; we are seeking a final status agreement.”