THE Middle East peace process lay in tatters yesterday after Washington admitted defeat in its efforts to secure an Israeli freeze on settlement building, the Palestinians’ condition for resuming talks.

Talks are being held today by Israeli and Palestinian leaders today in a bid to determine the future of a ceasefire in Gaza.

Hamas militants fired a barrage of rockets and mortar shells towards Israel today and said they considered a five-month truce to have ended.

Israel, pressured by international alarm over a brewing Palestinian humanitarian crisis, has agreed to release millions of pounds in funds it has withheld from the Palestinians and is considering easing restrictions on the transport of goods between Israel and the Gaza Strip.

Militant groups have agreed to halt their attacks as they near a final cease-fire deal with Palestinian leader Mahmoud Abbas, and await Israel’s response to their moves, a senior Palestinian official said today.