Mr Bush made a fresh push on Friday to unlock stalled negotiations on a massive financial rescue plan, warning 'we've got a big problem' and stressing 'we need a rescue plan'.

'The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion, Republicans and Democrats will come together and pass a substantial rescue plan,' he said.

'There are disagreements over aspects of the rescue plan - but there is no disagreement that something substantial must be done,' he said, one day after unprecedented White House crisis talks failed to yield a breakthrough.

With negotiations set to resume in the US Congress on Friday, Mr Bush underscored that he had not given up and said his embattled US$700-billion (S$996-billion) package reflected the scale of the crisis.

'My administration continues to work with the Congress on a rescue plan.

And we need a rescue plan. This is hard work, our proposal is a big proposal,' said the unpopular president.

'The reason it's big and substantial is we've got a big problem. We also need to move quickly,' said Mr Bush, who corralled top lawmakers and White House rivals John McCain and Barack Obama for the crisis talks on Thursday.

'Anytime you have a plan this big, that is moving this quickly, that requires legislative approval, it creates challenges. Members want to be heard,' said Mr Bush.

The hastily announced remarks on the rain-soaked South Lawn of the White House came as deadlocked talks on a bailout of the US financial system and the collapse of Washington Mutual bank sparked new falls on global markets on Friday despite the injection of tens of billions of dollars by central banks.

Democrats accused Mr McCain of sabotaging what they described as an emerging consensus on the shape of the package. The Arizona senator's aides denied the charge.

Pressure on markets increased with the collapse of Washington Mutual, the biggest US bank failure to date, which was taken over by JPMorgan Chase for US$1.9 billion.

Washington Mutual's shares have fallen 85 per cent this year and Standard and Poor's credit ratings agency recently estimated it had some US$14.4 billion in debt.

Hundreds of billions of dollars have been used to stabilise markets since the collapse of Lehman Brothers and the forced takeovers of American International Group (AIG) and Merrill Lynch in the deepening sub-prime crisis.

Senior lawmakers had announced the outlines of a deal to rescue Wall Street, but some Republicans dragged their feet.

Democrats called for limits on pay for executives whose companies get rescued under the government deal. And they said that any deal must include strict oversight by federal regulators.

After the White House meeting, Senator Harry Reid, leader of the Democratic majority, held new late-night discussions with Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke.

These also broke off without an accord and were to reconvene Friday. -- AFP