The Israeli Prime Minister, Ariel Sharon, has cancelled a visit to Washington he was due to make this week.
Mr Sharon had been expected to meet President Bush during the visit.
It was expected they would discuss the recent setback in Mr Sharon's peace plans when his own Likud Party rejected proposals to withdraw Jewish settlements in the Gaza Strip while retaining others in the West Bank.
The controversial plan had received the backing of Mr Bush.
Meanwhile, Palestinian negotiators have expressed discontent with statements made by President Bush in an interview with an Egyptian newspaper.
In a statement which was welcomed by Israeli authorities, President Bush said that he did not think it was realistic that there could be an independent Palestinian state by 2005.
Saeb Erekat, the head of the Palestinian Steering and Monitoring Committee, said the US leader's comments remove any substance from the so-called Roadmap peace process.
