WASHINGTON - There's an outcry on both sides of the Canada-U.S. border over an abrupt move by American officials to drop plans to pre-clear travellers and reduce costly congestion at land crossings.

Many are viewing it as a major black mark on bilateral relations since a co-operative measure publicly championed by the White House has been unceremoniously dumped by the Homeland Security Department.

It also belies a pervasive mistrust of Canada when it comes to security, say some U.S. observers.

"It's unacceptable to say it can't be figured out," former U.S. ambassador Gordon Giffin said Thursday from Calgary.

"The U.S. can't just throw up its hands. It's almost childish, like they're taking their marbles and going home," said Giffin, who served in Canada from 1997 to 2001.

He was involved in early discussions about moving U.S. Customs operations to Canadian soil at the Peace Bridge linking Ontario and New York.

"It's just not productive. For Pete's sake, we're working with Canada. We're not working with some Third World country."

A successful pilot project at the Peace Bridge would have been expanded to other crossings, easing traffic snarls that cost Canada some C$8 billion a year.

But Homeland Secretary Michael Chertoff pulled out of talks this week after two years of high-level discussions.

It came as a rude surprise to many since the measure is part of the Security and Prosperity Partnership announced with great fanfare by the leaders of Canada, the U.S. and Mexico in 2005 to keep borders open to trade but closed to terrorists.

Getting the project off the ground by the end of this year was cited as a top priority in February by the North American Competitiveness Council that reports to the leaders.

U.S. sources close to the discussions say the chief explanation for the move is a lingering view in the Bush administration that Canada's a pipeline for terrorists.

And they've got big concerns about the impact on diplomatic relations.

"For the U.S. to move unilaterally like this, what does that do for our credibility in trilateral talks?" asked one, who said the White House almost certainly gave its blessing to Chertoff.

The main sticking point was Homeland's unwillingness to accept Canada's legal problem with having U.S. authorities take fingerprints of people who approach the border but decide not to cross.

Canadian law doesn't permit fingerprinting unless someone volunteers or has been charged with a crime.

Canada's assurances that it would co-operate in investigating any suspicious person who approaches the border weren't enough, said one Capitol Hill source.

"The Attorney General's office really just wants to grab as much biometric information as it can," said the source.

Canada won't consider any proposal that doesn't comply with Canadian law,

Public Safety Minister Stockwell Day said Thursday in Ottawa.

But he's hopeful the U.S. will come back to the table.

It can't be soon enough for some.

New York Representative Louise Slaughter, a Democrat whose district includes the Buffalo crossing, is lobbying the White House to step in, saying the breakdown in talks reflects "a deeply flawed approach to the northern border" that includes the upcoming passport requirement.

Traffic tie-ups at the Peace Bridge have been a serious problem since the mid-1990s and got worse after the terrorist attacks on Sept. 11, 2001.

The bridge linking Fort Erie, Ont., with Buffalo is the second busiest vehicle crossing and third when it comes to trade, carrying $20 billion Cdn a year.

"This is a big disappointment," said David Stewart-Patterson at the Canadian Council of Chief Executives in Ottawa.

"The whole notion of land border pre-clearance is really important. It moves congestion away from the border itself," said Stewart-Patterson, who raised the issue Thursday at a Commons committee.

Letting the plan drop for too long will delay progress on substantially beefing up infrastructure at the border to accommodate increased traffic, he said.

"We're squandering really, really valuable time," said Len Crispino, head of the Ontario Chamber of Commerce.

"It's extremely frustrating. It's time we stopped playing these cat and mouse games and move away from these choke points," Crispino said from Toronto.

"These kinds of actions are actually hurting the economy more than the delays themselves. It's the uncertainty of it all. We seem to be going sideways."

In a letter Thursday to Chertoff, the chamber urged him to reconsider and noted significant job losses linked to border delays.

Meantime, many are worried about diplomatic damage from an issue that goes to the heart of Canada-U.S. relations.

"The U.S. has had pre-clearance service in Canada (at airports) since the 1950s," said Scotty Greenwood, executive director of the Canadian-American Business Council in Washington.

"It's a major pillar on which our relationship is founded. For DHS to walk away is really troubling and it's inconsistent with what the White House says it wants to do."