A crucial meeting on climate "loss and damages" ahead of COP28 ended in failure Saturday, with countries from the global north and south unable to reach an agreement, according to sources involved in the talks.

The agreement to set up a dedicated fund to help vulnerable countries cope with climate "loss and damage" was a flagship achievement of last year's COP27 talks in Egypt.

But countries left the details to be worked out later.

A series of talks held this year have tried to tease out consensus on fundamentals like the structure, beneficiaries and contributors — a key issue for richer nations who want China to pay into the fund.

A transition committee on the establishment of the fund met late Friday and into Saturday in Aswan, in southern Egypt.

But the delegates were unable to reach an agreement and deferred the decision to another meeting due 3 to 5 November in the United Arab Emirates, according to a webcast of the debate on the official YouTube channel of the United Nations.

Ahead of the breakdown, the discussion hit a hurdle over where the funds should be held.

There was a divide over it being managed by the World Bank, accused of being in the hands of the West, or in a new independent structure, called for by many developing nations, but would be time consuming and complex to replenish with new funds.

The failure "is a clear indication of the deep chasm between rich and poor nations," Harjeet Singh, head of global political strategy for Climate Action Network International, said in a statement to Agence France-Presse on Saturday.

"Developed countries must be held accountable for their shameless attempts to push the World Bank as the host of the fund, their refusal to discuss the necessary scale of finance, and their blatant disregard for their responsibilities" under the terms of already established international climate agreements, he said.

Rachel Cleetus with the Union of Concerned Scientists said that "today's disappointing outcome is a blow to communities… facing an unrelenting onslaught of climate impacts."

"The United States and other rich countries seem more focused on evading or minimizing their responsibility than engaging in good faith negotiations," she added.