House Republican leaders have abandoned plans for a vote Thursday night on raising the debt ceiling.
The leaders spent much of the day trying to persuade numerous Republicans to support a bill drawn up by Speaker John Boehner.
They halted consideration of the bill just as debate was ending in an effort to find more votes for it.
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Democratic leaders had said no one in their party intended to support the measure.
John Boehner earlier delayed the vote, after the discussion had already begun.
As Republicans sought to whip their new unruly conservative Tea Party members into line, the vote was postponed in an indication that the proposed bill might not yet have won enough party support, AFP reported.
Republican sources first insisted the vote on a two-step plan forged by House Speaker John Boehner to raise the nation's $US14.3 trillion ($A13 trillion) debt limit would take place later on Thursday, before abandoning it.
KERRY'S ANGER
Democratic Senator John Kerry expressed concern over the "serious" global impact of the US debt crisis and blamed Republicans for failing to reach a compromise with Democrats on a deal.
"I can't emphasize enough how serious it is on a global basis," Kerry, a Democrat who chairs the Senate Foreign Relations Committee, told reporters.
"I'm hearing people all over the world who are jittery about what the United States is doing, what the impact is."
CHALLENGING THE DEMS
Earlier, Republican lawmakers Thursday challenged Democratic foes to vote for their debt plan or risk a calamitous US default, in an acrimonious, lengthy showdown now threatening the world's fragile economy, AFP reported.
The House of Representatives was to vote later Thursday on a two-step plan forged by Speaker John Boehner to raise the nation's $14.3 trillion debt limit even though a majority of senators have vowed to block it and the White House has said it will veto the bill.
With only five days to go before an August 2 deadline when the US Treasury says it will no longer be able to borrow funds to pay its bills, stock markets remained nervous that a fragile economic recovery after the 2008 global financial crisis could be at risk.
European stocks markets ended mixed, weighed down by the debt strains in the United States, after Asian bourses had slumped earlier in the day.
US stock markets however opened higher as an unexpected improvement in jobless claims dispelled gloom about the debt-ceiling debacle in Washington.
Democrats have slammed Boehner's plan which would raise the debt ceiling for just a few months, saying it would only plunge the world's economic superpower back into crisis at the start of the 2012 presidential election year.
Boehner admitted his plan was "not perfect," but he said there were no "gimmicks or smoke screens."
"For the sake of jobs and for the sake of our country, I am asking the representatives in the House in a bipartisan way and asking my colleagues in the Senate, let's pass this bill and end this crisis."
Republican House Majority Leader Eric Cantor also appealed to Democrats, saying Senate Majority Leader Harry Reid had several choices.
"One is to suffer the economic consequences of default, which I hope, which all of us hope, he doesn't choose," Cantor said.
DEMS WON'T LET IT THROUGH
But Reid vowed the Boehner proposal, which would shave $915 billion off the national deficit over 10 years in return for hiking the debt ceiling by some $900 billion, would fail in the Democratic-controlled Senate.
"No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now," he said.
The White House however said it remained "optimistic" US lawmakers would clinch a compromise deal and avoid an unprecedented default.
"We continue to believe and remain optimistic that Congress will come to its senses... and that compromise will be achieved," said spokesman Jay Carney.
Every elected official in the nation's capital is "on the hook for the economy... everyone will have to answer to their constituents" if there's a default, he warned.
White House officials admitted Wednesday for the first time they are working on a back-up plan to keep the country running if in the worst case scenario the US is forced into default.
Washington hit its debt ceiling on May 16 but has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally.
The heads of Wall Street's top banks, meanwhile, urged President Barack Obama and Congress to reach a deal, warning of "very grave" dangers if there is no accord.
