Congress leader PC Chacko said that the AAP was adamant that along with Delhi, the two parties should fight together in Haryana and Punjab, a demand that was not acceptable to his party.
Congress has reportedly zeroed in on seven names for all constituencies. Sheila Dikshit, who heads the party's Delhi unit, is likely to contest from East Delhi, party sources told NDTV.
Ms Dikshit's predecessor in the state unit, Ajay Maken, is likely to be given ticket from New Delhi. Senior party leader and Rajya Sabha MP Kapil Sibal is likely to be fielded from Chandi Chowk, which he represented twice earlier. The other former parliamentarians expected to contest are Mahabal Mishra, JP Agrawal, Ramesh Sharma and Rajkumar Chauhan.
Both Congress and AAP had arrived at a pact for Delhi - four seats for AAP and three for Congress, but the deal fell off after AAP insisted that have tie-ups in Haryana and Punjab.
"I had a discussion with AAP leader Sanjay Singh and we decided on a 3:4 formula. That was finally decided but then AAP was discussing some other states," Congress leader PC Chacko said.
He claimed that Congress President Rahul Gandhi had pushed for an alliane with Arvind Kejriwal's party despite apprehensions in its Delhi unit.
"Our party policy all over India is to fight BJP and join hands with other like-minded parties. In Delhi, despite all our reservations with AAP, we wanted to join hands to defeat BJP," said Mr Chacko.
Attempts to stitch an alliance between AAP and the Congress started more than a month ago with a meeting at Maharashtra politician Sharad Pawar's home, where Mamata Banerjee also urged Arvind Kejriwal and Rahul Gandhi to get talking.
Congress leaders in Delhi, especially its chief Sheila Dikshit, were however against any tie-up. Ms Dikshit, whose 15-year dream run in the capital as chief minister ended because of AAP, had even warned Rahul Gandhi and his mother Sonia Gandhi in a letter that an alliance with Mr Kejriwal's party would hurt the Congress in the long run.
The talks crashed over AAP's insistence on a tie-up in Haryana and Punjab. Arvind Kejriwal, the Chief Minister of Delhi, even claimed he would not need Congress's help to win the seven seats in Delhi but a tie-up would help limit the BJP in Haryana and in Punjab.
His party later sealed a tie-up with JJP or Jannayak Janata Party.
Elections in Delhi will be held in the sixth phase on May 12 for all 7 Lok Sabha seats. The counting of votes will be done on May 23.