US President Barack Obama has warned that world leaders were nervous Republicans would "blow up" the US economy, and vowed not to budge on his demand for the debt ceiling to be lifted without conditions.
But House Speaker John Boehner insisted there would be no "unconditional surrender" from Republicans and said Congress would only allow more US borrowing if Obama agrees to cut spending.
There was, however, one glimmer of hope for progress in the bitter showdown that has closed the US government for more than a week and sparked fears that Washington could default on its commitments if the debt ceiling is not raised by October 17.
Obama said that, if necessary, he would accept a short-term deal to raise borrowing and reopen the government - a move that would effectively postpone the crisis for a number of weeks.
But the president was adamant that he would not compromise on his refusal to cede ideological concessions to Republicans in return for receiving more authority to borrow money to finance US obligations.
"What you haven't seen before, I think, from the vantage point of a lot of world leaders, is the notion that one party in Congress might blow the whole thing up if they don't get their way," Obama said at a White House news conference.
"They've never seen that before. And that does make them nervous."
Obama spoke a day after China, which is sitting on a vast pile of US Treasury bonds, warned that the time was running out for the United States to prove its creditworthiness.
Boehner appeared on television soon after Obama's news conference to dig further into his own position.
"We can't raise the debt ceiling without doing something about what's driving us to borrow more money and to live beyond our means."
Obama, who spoke to Boehner earlier by phone, argues that raising the debt ceiling is vital to America's creditworthiness, which should not be prey to political uncertainty.
If the US$16.7 trillion debt ceiling is not raised by October 17, the United States will be unable to borrow more money and will begin defaulting on its obligations.
The president said that a default would be, in the words of economists he quoted, "insane, catastrophic, chaos."
With both sides locked in stalemate, Senate Democratic leader Harry Reid introduced legislation late on Tuesday that would raise the debt ceiling until the end of 2014 "with no preconditions or strings attached".