Israel and the Palestinians appeared determined Monday to seal their divorce as Washington's deadline for reaching a Mideast peace deal was to expire, leaving hopes for a breakthrough in tatters.

After more than a year of intensive shuttle diplomacy by U.S. Secretary of State John Kerry with the initial aim of brokering a deal by April 29, Washington's patience appeared to be growing thin as both sides moved to distance themselves from the crisis-hit talks.

Traffic across Israel ground to a halt for two minutes and pedestrians stood still as the nation paused on Monday to remember the six million Jews killed in the Holocaust. 

As sirens wailed at 0700 GMT, the activity on the normally-bustling streets of Jerusalem abruptly stopped as people froze to observe a ritual which takes place every year on Holocaust memorial day, which began at sundown on Sunday. 

U.S. Secretary of State John Kerry told a group of senior international officials that Israel risks becoming an "apartheid" state if it does not make peace soon, a U.S. news website reported.

Kerry made the controversial remarks at a closed-door meeting of the influential Trilateral Commission on Friday, The Daily Beast news website reported Sunday.

The military readiness of the Israeli army to engage in a war with Hizbullah has distinctly decreased, the Israeli right-wing newspaper Maariv said in a report.

According to statements by high-ranking Israeli army officers, the Jewish state cannot engage in a war with Hizbullah anytime soon.

The Palestine Liberation Organisation's central council on Sunday adopted a plan to pursue attempts to join 60 United Nations bodies and international agreements.

The council, under the auspices of president Mahmud Abbas, "affirms the need for the Palestinian leadership to continue membership of U.N. agencies and international conventions", the Palestine People's Party secretary general Bassam al-Salhi said in a statement.

Israeli Prime Minister Benjamin Netanyahu warned anew on Sunday of a nuclear-powered Iran at the annual Holocaust memorial for the victims of the Nazi genocide, saying Tehran wants "our destruction."

"Iran is calling for our destruction, it is building underground bunkers to enrich uranium, producing heavy water for plutonium, acquiring intercontinental missiles capable of carrying nuclear warheads that threaten the entire world," Netanyahu said.

Israeli cabinet ministers on Sunday differed over the likely fallout on the battered Middle East peace process from an intra-Palestinian reconciliation agreement.

Wednesday's surprise deal, which saw Palestinian leaders from the West Bank and the Hamas-run Gaza Strip agree to work together after years of bitter rivalry, was denounced the next day by the Israeli security cabinet.

The European Union on Sunday urged Israel and the Palestinians to return to the negotiating table, saying U.S. efforts to broker peace must not be allowed to "go to waste."

"Negotiations are the best way forward," EU foreign policy chief Catherine Ashton said in response to the breakdown last week in months of efforts by Washington to keep the two sides talking.

The mass killing of Jews in the Holocaust was "the most heinous crime" against humanity in the modern era, Palestinian President Mahmud Abbas said Sunday in his strongest remarks yet on the Nazi genocide.

The statement comes at a sensitive time for U.S.-led peace efforts, with Israel having suspended faltering talks last week after Abbas reached an agreement with the Islamist Hamas movement to form a unity government.

Iran welcomed Saturday a reconciliation deal between the two main Palestinian factions -- the Palestine Liberation Organization and Hamas -- which it said was against the "Zionist regime," a reference to Israel.

"The Islamic Republic of Iran salutes the reconciliation of the Palestinian groups against the Zionist regime... and against the excessive demands and aggression of the Qods (Jerusalem) occupation regime," said foreign ministry spokeswoman Marzieh Afkham.