Mitt Romney told donors the Palestinians "have no interest whatsoever" in peace with Israel and if elected president he would just kick the issue down the road, a leaked video showed.
Trailing in opinion polls, the Republican challenger could have done without the embarrassing disclosure as he only has seven weeks to catch Democratic President Barack Obama before Americans vote on November 6.
Romney faced a barrage of domestic criticism yesterday over initial excerpts from the May 17 fundraiser in which he wrote off Democratic voters as "victims" who are dependent on government handouts and beyond his help.
The liberal magazine Mother Jones revealed more of Romney's remarks from the US$50,000-a-plate Florida event overnight NZ time, this time on foreign policy and related particularly to the Israeli-Palestinian question.
Romney's foreign policy credentials were already under the microscope after he was condemned as unpresidential for launching an attack on Obama in the immediate aftermath an attack on a US consulate in Libya that left four dead.
Asked at the fundraiser if the "Palestinian problem" can be solved, Romney replied that the Palestinians have "no interest whatsoever in establishing peace, and that the pathway to peace is almost unthinkable to accomplish."
Displaying little nuance about the attitude of different factions in the West Bank and the Gaza Strip, his remarks appeared to dismiss the possibility that any Palestinian leaders are willing to work towards peace with Israel.
"I look at the Palestinians not wanting to see peace anyway, for political purposes, committed to the destruction and elimination of Israel, and these thorny issues, and I say there's just no way," Romney said.
"You move things along the best way you can. You hope for some degree of stability, but you recognise that this is going to remain an unsolved problem - and we kick the ball down the field and hope that ultimately, somehow, something will happen and resolve it."
The White House said Romney's remarks showed he was not fit to lead and noted that Obama's predecessors, both Democrat Bill Clinton and Republican George W. Bush, took on the treacherous search for Middle East peace.
"It is simply the wrong approach to say, we can't do anything about it, so we'll just kick it down the field," said Obama spokesman Jay Carney. "That's not leadership. That's the opposite of leadership."
Romney's stance that any peace bid is futile comes despite polls that show US Jews, many of whom live in the key swing state of Florida, overwhelmingly seek active American leadership to resolve the Arab-Israeli conflict.
He has attacked what he says is Obama's weak and misguided Middle East policy, saying in January the president "threw Israel under the bus," by defining the 1967 borders as a starting point for Israeli-Palestinian negotiations.
Romney infuriated the Palestinians in July when he endorsed Jerusalem as the capital of the Jewish state during a visit to Israel.
"The idea of pushing on the Israelis to give something up to get the Palestinians to act is the worst idea in the world," he said at the May fundraiser, providing further evidence of his staunch pro-Israeli position.
The White House could barely suppress its glee after the first excerpts emerged on Monday evening with Romney saying 47 per cent of Americans are essentially freeloaders who will vote for the president "no matter what."
"It's hard to serve as president for all Americans when you've disdainfully written off half the nation," Obama campaign manager Jim Messina said in a statement.
Romney held a hastily-arranged press conference on Tuesday night in Los Angeles to try to stem the bleeding, conceding that his "off the cuff" remarks had not been "elegantly stated."
Since the party conventions two and three weeks ago, Obama has pulled ahead of Romney. Opinion polls show the Democratic incumbent ahead both nationally and in the key battleground states.
The Romney camp insisted their man could still win the race.
"We remain pretty focused and determined," top aide Kevin Madden told journalists on the plane as the candidate flew Tuesday to Salt Lake City. "It's a close, hard-fought campaign and it will be until election day."
Meanwhile the grandson of former U.S. President Jimmy Carter says he persuaded the source who secretly taped Republican presidential nominee Mitt Romney at a private fundraiser to release the full video to the media.
James Carter IV says he was intrigued, midway through a routine Internet search, after seeing what he describes as a short, mysterious clip of Romney talking about Chinese factory conditions.
"The hidden camera video it was all burred out at the beginning, and it was mysterious,'' Carter said. "It piqued my interest.''