Delegates have been working to narrow differences
Israel said that repeated calls from Arab states to equate Zionism with racism were totally unacceptable and maintained that the Israeli Palestinian conflict should be completely removed from the agenda.
Earlier, UN Human Rights Commissioner Mary Robinson said progress had been made on language, adding that she was hopeful enough had been done to prevent the US boycott.
But BBC correspondent Emma Jane Kirby says Israel's decision will clearly have much influence over the US.
With less than three weeks to go before the negotiations are due begin in the South African city of Durban, she says, it is now questionable whether the conference will ever really get off the ground.
Political conflict
Asking to speak early because of the approach of the Jewish Sabbath, the Israeli ambassador to the UN, Yaakov Levy, accused the conference of singling out Israel and speaking of it with "shameful language".
As the Friday midnight deadline for agreeing the agenda approached, Ambassador Levy said the Israeli-Palestinian conflict was essentially a political one and therefore had no place on the racism agenda.
He said subsequently Israel would be considering is attendance at the conference in the days to come.
The US delegation said it was pleased there had been "some progress" but accused some delegations of extremism.
"The agenda in Durban should not be to single out and brand a certain country as racist. Have we no shame?" Deputy Assistant Secretary of State Michael Southwick said.
Ms Robinson said that agreement had been reached on the main paragraphs and there had been "considerable progress" with regard to language.
"There is a genuine feeling that this is going to be one of the real breakthroughs in Durban," she told journalists gathered for the Geneva meeting.
'Lynching of Israel'
The recent upsurge in violence in the Middle East had led to proposals to revive the 1975 United Nations General Assembly resolution that equated Zionism with racism.
The resolution was repealed in 1991, having been vehemently opposed by Israel and the United States.
At the beginning of the negotiations, Ms Robinson warned that if Zionism was once again put onto the agenda as a racist issue, the conference would fail.
US congressman Tom Lantos, a Holocaust survivor, said on Thursday that attending the conference would make the US "party to the lynching of Israel".