Israel will not take international tourism officials to visit occupied East Jerusalem, the government says.
The decision follows protests over remarks by an Israeli minister that a conference of the Organisation for Economic Co-operation and Development was in effect an approval of Jerusalem as Israel's undivided capital.
The OECD had described the comments as unacceptable.
Jerusalem's status is one of the most divisive issues in the Middle East.
Tourism Minister Stas Misezhnikov said delegates were welcome to visit East Jerusalem during the tourism conference later this week, but that such visits would "not be arranged by the Ministry of Tourism or the government".
Officials from nearly two dozen OECD member states are expected to attend the meeting, which starts on Wednesday.
Palestinian officials have urged countries to boycott the conference.
The UK is not sending a delegation because of the "unavailability of relevant delegates". Reports say Spain is doing the same because of scheduling problems.
Israel claims the city as its eternal, undivided capital, while Palestinians want East Jerusalem to be the capital of any future Palestinian state.
It includes Jerusalem's Old City and holy sites such as the Dome of the Rock and the Western Wall.
The international community does not recognise Jerusalem as Israel's capital, and most countries maintain embassies in Tel Aviv.
This conference, scheduled to start on Wednesday, is Israel's first as an OECD member. The country was accepted as a member of the OECD five months ago.
In an interview with the Haaretz newspaper earlier this week, Mr Misezhnikov said the conference would "be a declaration of intent and affirmation that we have a state whose capital is recognised".
Following these remarks, OECD secretary-general Angel Gurria warned Israeli Prime Minister Benjamin Netanyahu in a letter that "in order to go forward with the meeting on the current basis, the tourism minister should correct the misperception created and put the meeting in its proper perspective".
On Monday Mr Misezhnikov said that he had been misquoted.
"I said that the existence of this summit in Israel is a very good example of how the members of the OECD value Israel as a very strong state economically and in tourism."
Mr Misezhnikov said 28 of the 33 OECD members have agreed to participate.
The minister is a member of the right-wing Yisrael Beiteinu party, which is led by Foreign Minister Avigdor Lieberman.
Correction 19 October 2010: An earlier version of this report wrongly said that the UK and Spain were boycotting the conference because it is being held in Jerusalem.