The U.S. State Department said Thursday there is no indication that the Palestinians have pulled out of indirect talks with Israel.

"We've heard nothing to indicate that they've pulled out," State Department spokesman Philip Crowley said at a news briefing.

Palestinian President Mahmoud Abbas told Arab League Secretary- General Amr Moussa on Wednesday night that the Palestinians will not engage in any talks with Israel under the current situation, the official MENA news agency reported.

A statement by the Arab League also said the Israeli government 's approval to build new settlement units proved Israel was not ready to engage in any serious drive for peace.

The Israeli Interior Ministry approved on Tuesday the building of 1,600 new settler homes in East Jerusalem, just one day after U. S. President Barack Obama's special envoy to the Middle East George Mitchell announced that the Israeli and Palestinian sides had agreed to hold indirect talks.