Boehner, the House speaker, said talks with Obama had become futile [AFP]

President Barack Obama on Friday said talks with top Republican leaders toward a debt deal to avert default broke down over tax revenue but that both sides had been only about $10 billion apart on spending cuts.

Obama told reporters "there does not seem to be a capacity" for Republicans to agree to a debt limit deal."

He railed at House Speaker John Boehner for walking away from talks on raising the US debt ceiling, and summoned the House leader and others to the White House for further discussions on Saturday.

Saying his plan was an "extraordinarily fair deal," Obama said, "We have now run out of time."

He summoned Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi to the White House for a meeting at 11 am on Saturday, where he said these congressional leaders "are going to have to explain to me how it is that we are going to avoid default."

Earlier, Boehner said he will now begin negotiations with Senate leaders aimed at meeting an August 2 deadline to avert an unprecedented US debt default.

In a letter to congressional colleagues, Boehner, the top US Republican, said talks with the Democratic president had become futile, citing Obama's demand to raise taxes.

"The president is emphatic that taxes have to be raised," Boehner wrote. "As a former small businessman, I know taxes destroy jobs."

Boehner's surprise announcement came a day after reports he and Obama were nearing a 10-year deal on $3 trillion in cuts that riled the president's fellow Democrats. They complained that it included no guarantees of additional tax revenues and would likely force benefits cuts in popular entitlement programs such as Social Security and Medicare.

Just a month ago, Boehner's deputy, House Republican leader Eric Cantor, walked out of deficit-reduction negotiations with Vice President Joe Biden, complaining that the administration was insisting on tax hikes despite Republican objections.

The US hit its debt ceiling on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to pay its bills and continue operating normally, but can only do so until August 2.

The largest US creditor, China, has twice warned that the US must protect investor interests, while ratings agencies Moody's and Standard & Poor's have said the sterling Triple-A US debt rating was in danger of a downgrade.

Source: Agencies