The US acknowledged late on Monday night that the release of secret Palestinian files on US-brokered regional peace talks makes the Middle East situation “more difficult,” but said a framework peace deal remained possible.

“None of this changes our understanding of what is at stake and what needs to be done,” State Department spokesman Philip Crowley said.

He was referring to the release of documents by Al-Jazeera news channel which show Palestinians offered Israel major concessions on the thorny issues of annexed east Jerusalem and refugees in 2008 peace talks.

“We don’t deny that this release will, at least for a time, make the situation more difficult than it already was, but again, we are clear-eyed about this, we always recognised that this would be a great challenge but it doesn’t change our overall objective.”

Mr Crowley said US officials have had “contact with both the Israelis and the Palestinians over the last 24 hours”, as well as with several regional leaders.

“We continue to believe that a framework agreement is both possible and necessary, so we continue to work and engage the parties as we’ve done throughout the process,” the spokesman said.

Late on Sunday, shortly after Al-Jazeera began releasing the first of some 1,600 documents known as the “Palestine Papers” on more than 10 years of secret talks, Washington said it would continue pressing for a two-state solution to the Israeli-Palestinian conflict.

Chief Palestinian negotiator Saeb Erakat, quoted in several of the documents, dismissed most of the report as a “pack of lies” and insisted the Palestinian Authority had “nothing to hide”.

In one of the documents Mr Erakat is quoted as saying: “What is in that paper gives them the biggest Yerushalaim in Jewish history,” using the Hebrew name for the Holy City.

He was talking about a Palestinian offer in 2008 which would allow Israel to keep all but one of its settlements in east Jerusalem as well as the walled Old City’s Jewish Quarter and part of the Armenian Quarter.