The first summit of North African heads of state in more than a decade, which was due to take place in Libya, has been postponed indefinitely.
Morocco's foreign ministry said King Mohammed VI would not attend
The postponement came after King Mohammed VI of Morocco said he would not attend because of a dispute with Algeria over Western Sahara.
At the weekend, Algeria reiterated its support for the Saharan independence movement, Polisario.
The summit was due to take place in Tripoli on Thursday.
The foreign ministers of the Arab Maghreb Union's member states - Morocco, Algeria, Mauritania, Libya and Tunisia - met on Monday to discuss the summit's agenda.
Organisers had said that the issue of Western Sahara would be left off the agenda to ensure that the meeting went ahead.
However, the Moroccan foreign ministry said in a statement that statements by Algerian President Abdelaziz Bouteflika supporting independence for Western Sahara "directly affect the higher interests of the [Moroccan] kingdom".
"The summit is postponed to give more time to solve the dispute and hold the next summit without problems," Mauritanian Foreign Minister Mohamed Vall Ould Bellal told al-Jazeera television.
The Libyan authorities have yet to confirm the cancellation.
Morocco claims sovereignty over Western Sahara, while Algeria has long been accused of backing the Polisario Front.
The Polisario Front has been fighting to establish an independent state since Western Sahara was seized by Morocco after colonial ruler Spain left in 1975.
While Algeria has repeatedly denied involvement, it has been vocal in its support for Polisario's struggle.
The United Nations views Western Sahara as a disputed territory.