The African Union said on Sunday it will not formally admit Israel as an observer state.
Assembly of heads of state and government, who were to vote on the decision by AU chairperson Moussa Faki Mahamat, postponed the decision and will now decide at next year's Summit, according to a special committee that gathered views from members and presented a report.
The decision follows a Saturday speech by Palestine PM Mohammad Shtayyeh at the AU summit asking that Israel be ignored for the violations it is imposes on Palestinians.
"Israel should never be rewarded for its violations and for the apartheid regime it imposes on the Palestinian people," he said.
The chairperson had admitted Israel last year as an observer state after accepting credentials from Israeli Ambassador to the AU.
But the formal admission needed a vote of at least 2 thirds majority of voting members for Israel to be formally admitted.
Formal admission could grant Israel opportunity to address the Assembly of Heads of State and Government, as well as present views in various key organs of the AU.
Observer states, which Palestine has been since 2013, do not have a vote at the AU. But they use the access to lobby for favourable decisions on issues that may affect them.
AU's policy has traditionally been that of seeking a two-state solution between Israel and Palestine, one of the world's most enduring conflicts.
And while both Israel and Palestine accept two-states will resolve the conflict, they haven't agreed on what territory will fall to which side.
Palestine has accused Israel of grabbing its land and violating a proposal reached in the 1960s on how their borderlines should run.
Palestine, also an observer state at the UN, has often been granted a chance to address the Assembly of Heads of State at the African Union.