The World Cup warmup match had been scheduled to take place on Saturday.
But its status had been placed in doubt earlier, following protests by Palestinian football authorities who had urged Messi not to take part.
“The Embassy of Israel regrets to communicate the suspension of the match between Israel and Argentina,” a statement said, referring to “threats and provocations” against Messi.
Local media had reported earlier Tuesday that the game was set to be scrapped, depriving Messi and his team-mates of a final warm-up game before they open their World Cup campaign in Russia.
Argentine Foreign Minister Jorge Faurie told reporters in Washington on the sidelines of the Organization of American States meeting that he believed Argentina’s players had been reluctant to travel to Israel for the game.
“As far as I know, the players of the national team were not willing to play the game,” Faurie said before confirmation of the game’s cancellation.
Argentina coach Jorge Sampaoli had last week aired misgivings about having to travel to Israel, noting he would have preferred to remain in Barcelona, where the team is holding its pre-World Cup training camp.
“From a sporting point of view, I would have preferred to play in Barcelona,” Sampaoli said.
“But that’s the way it is, we have to travel on the day before the match, play Israel in Israel and then from there go on to Russia.”
On Sunday, Palestinian football boss Jibril Rajoub urged Messi not to play in the game in Jerusalem and urged fans to burn shirts bearing his name if he did.
At a news conference in the West Bank city of Ramallah, Rajoub told journalists he had written to Argentina’s government asking that Messi not take part in the June 9 friendly.
“This match has become a political tool,” Rajoub said in Arabic.
“The Israeli government is trying to give it political significance by insisting it be held in Jerusalem.”
The Palestinian Football Federation welcomed the cancellation of the match and said that with it, sport will not be used as “a tool of political blackmail.”
It praised the Argentine players “led by the star Messi for refusing to be used as a bridge to achieve non-sporting goals.”
Palestinians are outraged at US President Donald Trump’s decision last December to recognize Jerusalem as Israel’s capital, breaking with decades of policy, and move his country’s embassy there.
The embassy opened on May 14, fanning Palestinian anger and intensifying protests on the Gaza border, with Israeli forces killing at least 61 Gazans that day.
Palestinians claim the eastern part of Jerusalem, annexed by Israel, as the capital of their future state. The Jewish state considers the entire city its own “indivisible” capital.
“Messi is a symbol of peace and love,” Rajoub said. “We ask him not to participate in laundering the crimes of the occupation.”
Messi, he added, “has tens of millions of fans in the Arab and Muslim countries… we ask everyone to burn their shirts which bear his name and posters (with his image).”