US President Barack Obama said on Friday it was still in the interest of Israel and the Palestinians to seek peace.

Israel on Thursday suspended US-sponsored peace talks with the Palestinians in response to Palestinian Authority Chairman Mahmoud Abbas' unexpected unity pact with the rival Islamist Hamas group.

The negotiations had appeared to be heading nowhere even before Wednesday's reconciliation agreement between the Palestinian groups plunged them deeper into crisis.

The United States had been struggling to extend the talks beyond an original April 29 deadline for a peace accord.

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