Officials said the administration of President Barack Obama has withdrawn its offer for another 20 F-35 fighter-jets.
They said the offer was part of a U.S. proposal for an extension of Israel's construction freeze in Jerusalem and the West Bank as well as final status negotiations with the Palestinian Authority.
"We made a strong effort, and everyone tried in good faith to resume direct negotiations in a way that would be meaningful and sustainable," a senior administration official said. "But the extension wasn't actually going to do that."
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