The deadlock followed a decision yesterday by the RUC in Belfast to ban a small Apprentice Boys parade through the Catholic flashpoint of Lower Ormeau Road on Saturday morning. The police feared the smaller march could inflame the larger parade in Londonderry.
A number of people were injured in clashes with loyalists on Easter Monday when the RUC banned a parade through the road. Local Catholics also complained about becoming "prisoners" in their own homes when police and soldiers sealed off the road from an Orange parade on 12 July.
After violence last year, Apprentice Boys and Bogside residents held three meetings to discuss this year's march, under the guidance of the local SDLP MP John Hume. A variety of compromises have been put forward, including cutting the number of loyalists who walk the Derry walls. The celebrations commemorate the 13 apprentices who shut the city gates to the deposed King James II's army in 1688.
All sides fear a re-run of incidents at Drumcree in early July when the RUC decision to ban and then allow an Orange Order march through the Catholic Garvaghy Road area of Portadown provoked Province-wide violence and a return to open sectarianism.
Nationalists meanwhile have set a deadline of tomorrow for reaching agreement on the crucial Londonderry parade.
The RUC ban drew condemnation from the Democratic Unionist Party whose justice spokesman, Ian Paisley junior, claimed the decision would raise tensions and "fail to achieve a peaceful settlement".
March organisers and nationalist protesters will meet again today.