"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.
Reports also surfaced earlier Tuesday of a Palestinian threat to torpedo Argentina's bid to host the 2030 World Cup.
According to reports, the Argentina's football association made the decision to withdraw from the Saturday friendly amid an escalation of violence and criticism.
A picture taken on June 5, 2018, shows a poster erected on a main street in the West Bank town of Hebron next to a portrait of the Palestinian president Mahmud Abbas (R), denouncing the upcoming friendly football match between Argentina and Israel and calling Argentina's star Lionel Messi (portrait) to boycott the match.
Rajoub said that Palestinians only began to campaign against the match after Culture and Sport Minister Miri Regev chose to move it to Jerusalem and "turn it into a political event". "Values, morals and sport have secured a victory today and a red card was raised at Israel through the cancellation of the game".
On Argentina's World Cup chances, Messi said: "We have to make ourselves stronger to be at the same level as France, Germany, Brazil or Spain".
"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 Russian Federation".
Argentina's Lionel Messi and teammates celebrate at the end of the match.
There was no initial reaction from the Israeli FA or from Israeli politicians.
The game was originally scheduled to be played in Haifa but Israeli authorities later arranged it to be moved to Jerusalem, thus adding to Palestinians' anger and frustration over last month's opening of the US Embassy in the city part of which they claim as their own capital.
The news was met with cheers in Gaza, where at least 120 Palestinians were killed by Israeli forces during recent protests.
"I don't consider myself the best, I think I am just another player.On the field, we are all the same when the game begins", Messi said.