White House senior adviser Jared Kushner is part of a delegation that traveled to the Middle East for peace talks, the Trump administration said Tuesday.
According to Al-Hayat, a US delegation headed by Kushner told Abbas this week that "stopping settlement construction is impossible because it will cause the collapse of the Netanyahu government".
They have also held talks with Egyptian, Saudi, Emirati, Qatari and Jordanian officials.
A United States official told Israeli media outlets that the report was "nonsense" and the comment was never made.
"We are not going to state what the outcome has to be - it has to be workable to both sides". Most significantly for the Palestinians was the failure to obtain economic freedom to develop what is termed "Area C" in the 1993 Oslo Accords - the section of the West Bank under both Israeli administrative and security control - and a commitment from the American interlocutors to establish dates and milestones for the negotiating process it oversees.
For weeks Palestinian officials have called on the United States to back a two-state solution and ask Israel to stop building settlements in the occupied West Bank, which most of the worldwide community considers illegal and an obstacle to the creation of any future Palestinian state.
The two-state solution envisions an independent Palestinian state alongside Israel and has been the focus of global diplomacy for years.More news: Trump says GOP botched debt ceiling negotiations
It's not an uncommon threat for the Palestinian leadership to make.
Ahmed Majdalani, a senior Palestinian Liberation Organisation official who is close to Abbas, told AFP on Thursday that one option if no progress is reached would be to dissolve the Palestinian Authority - a threat that has been made in the past.
"President Trump is very optimistic and hopes for a better future for the Palestinian people and the Israeli people", Kushner said.
An 8-year-old Palestinian girl was killed on Saturday after being struck by an Israeli vehicle in the Nablus district of the nerthern occupied West Bank, according to Israeli sources.
He is also facing a graft investigation that limits his room for political manoeuvre, Shapiro noted.
The Palestinian threats came shortly after the Trump Administration broke with decades of American foreign policy by declaring it was no longer committed to the "two-state solution".