Striker Gonzalo Higuain said they had "finally done the right thing".

But Israel's defence minister said it was "too bad" Argentina's footballers did not "withstand the pressure of the Israeli-hating inciters".

"We will not yield before a pack of anti-Semitic terrorist supporters," Avigdor Lieberman tweeted.

The Israeli embassy in Argentina tweeted to confirm that the friendly, which was due to take place in Jerusalem on Saturday, had been "suspended".

Israeli Prime Minister Benjamin Netanyahu called Argentina's president in an attempt to salvage the tie, but was told by Mauricio Macri that "there was nothing that I could do", Israel's Army Radio reported.

Argentine Foreign Minister Jorge Faurie had said he believed his country's footballers "were not willing to play the game".

"In the end, they've done right thing, and this is behind us," Higuain told ESPN. "Health and common sense come first. We felt that it wasn't right to go."

The news was met with cheers in Gaza, where at least 120 Palestinians were killed and thousands more injured by Israeli forces during recent protests.

In Ramallah in the occupied West Bank, the Palestinian Football Association issued a statement thanking Argentina striker Lionel Messi and his teammates.

"What happened... is a red card from the rest of the world to Israelis," the association's president, Jibril Rajoub, told a news conference on Wednesday.