The White House rejected a Republican plan to reopen portions of the US government on Tuesday as the first shutdown in 17 years closed landmarks like the Statue of Liberty and threw hundreds of thousands of federal employees out of work.

The back and forth offered no sign that President Barack Obama and Republicans can soon end a standoff over health care that has sidelined everything from trade negotiations to medical research and raised new concerns about Congress's ability to perform its most basic duties.

The Republican plan would restore funding for national parks, veterans services, and the District of Columbia. Other government services would remain unfunded.

While the selective funding approach appeared to unite conservative and moderate Republicans for now, the White House said Obama would veto it.

Democrats who control the Senate said they would reject it before it reached Obama's desk.

Republicans who control the House of Representatives said Obama could not complain about the impact of the shutdown while refusing to negotiate. "The White House position is unsustainably hypocritical," said Michael Steel, a spokesman for House Speaker John Boehner.

Shutdown effects

The partial shutdown meant that 800,000 "non-essential" workers were forced to remain home on Tuesday.

The Republican-controlled House has passed two spending bills in recent days, both of which have been rejected by the Democrat-led Senate. House Republicans asked for a conference on the budget with the Senate, but the upper house of Congress killed that proposal when it met on Tuesday morning.

Senate majority leader Harry Reid, a Democrat, said that he would not negotiate as long as the House linked the budget law to the healthcare law.

Tuesday's Senate vote was the fourth time since this political battle began that the body had rejected a House Republican bill or proposal.

Some critical parts of the government, including the military and air traffic control, will remain open. The shutdown will, however, keep hundreds of thousands of federal workers at home and unpaid.

It could affect government services including park management, food assistance for children and pregnant women and federal home loan programmes. Federal agencies, such as NASA, the Environmental Protection Agency (EPA) and others, were also affected.

In an earlier statement, Obama spoke bluntly about House Republicans: "You don't get to extract a ransom for doing your job, for doing what you're supposed to be doing anyway, or just because there's a law there that you don't like."

Speaking of the healthcare law that undergoes a major expansion on Tuesday, he said: "That funding is already in place. You can't shut it down."

Signs of dissent

The Republican speaker of the House, John Boehner, responded a few hours later on the House floor. "The American people don't want a shutdown and neither do I," he said. However, he added, the new healthcare law was having "a devastating impact ... something has to be done".

House Republicans have sought a year's delay in a requirement in the healthcare law for individuals to buy coverage.

However, in recent days several Republican senators and House members have said they would be willing to vote for straightforward legislation with no healthcare-related provisions.

The last shutdown, in the winter of 1995-96, severely damaged Republican election prospects.

Stock markets around the world reacted resiliently to the shutdown on Tuesday morning, with analysts saying significant damage to the US economy was unlikely unless the shutdown lasted more than a few days.

After falling the day before the US shutdown deadline, European stocks mostly recovered. In Asia, stocks were mixed, while Wall Street was expected to open slightly higher.

PHOTO CAPTION

A 'Do Not Cross' yellow barrier tape hangs on the barricade closing the World War II Memorial on the National Mall in Washington, DC, on October 1, 2013.

Aljazeera