Discussions in Washington last week between US security experts and the Berlin authorities failed to break the deadlock. Yesterday a German newspaper said the embassy would be built elsewhere.
The root of the problem is the lack of space for the security zone demanded by the Americans. The Pariser Platz site, in the centre of the new German capital, backs on to the Brandenburg Gate. It is a few minutes' walk from the Reichstag and three buildings down from the new British embassy.
US rules require all new embassies to be surrounded by a 30m (100ft) security zone. That has been resisted, because it would mean re-routing streets, cutting into a park and restricting traffic. And a bank next door would have to fill in or close off its underground garage.
Peter Strieder, Berlin senator for city development, denied reports in the Berliner Morgenpost that the meeting in Washington killed any prospect for more negotiation.
A spokeswoman for the US embassy said the Americans were still confident a solution could be found for the mission to be built on Pariser Platz. Since the move from Bonn the embassy has been in a temporary building in Berlin.Reuse content