Egyptian diplomat and intelligence official say the decision will be announced on Thursday at a meeting of Palestinian factions.
Egyptian officials say the Palestinian Authority plans to call off its first elections in 15 years, citing Israel’s refusal to allow voting in occupied East Jerusalem.
The decision effectively grants Israel a veto over the holding of elections, though President Mahmoud Abbas could also benefit from cancelling the vote, in which his fractured Fatah party is expected to lose power and influence to Hamas, the group governing the Gaza Strip.
An Egyptian diplomat and an intelligence official – who spoke on condition of anonymity to discuss closed-door talks in Cairo – said they were briefed on the decision, which will be announced on Thursday at a meeting of Palestinian factions.
They said Egypt is in discussions with Israel to reach a compromise to allow the vote, but those efforts have so far failed.
The intelligence official said Hamas wants the elections to go ahead but no faction wants to proceed without guarantees from the international community that voting will be held in occupied East Jerusalem.
The official said the factions are discussing the formation of a unity government instead that would include Hamas.
The Palestinian Election Commission says 6,000 voters in East Jerusalem would need to submit their ballots through Israeli post offices in accordance with past agreements, while the other 150,000 could vote with or without Israeli permission.
The small number of voters who require Israeli permission are unlikely to have a decisive impact on the vote, but their participation is seen as symbolically important for maintaining Palestinian claims to East Jerusalem.
Israel has not said whether it will allow them to vote.
They also provide a pretext for Abbas to cancel a parliamentary election that his Fatah movement is expected to lose badly. Fatah has split into three rival lists, paving the way for Hamas to emerge as the biggest party in parliament.
‘Death to Arabs’
Israel captured East Jerusalem, along with the West Bank and Gaza, in the 1967 war. The Palestinians want all three territories for their future state and view East Jerusalem as their capital.
Israel annexed the eastern sector of the city in a move not recognised internationally. It considers all of Jerusalem to be its capital and bars the Palestinian Authority from operating there.
The city’s fate has been one of the thorniest issues in the peace process, which ground to a halt more than a decade ago.
Tensions have flared in Jerusalem in recent days after the arrival of far-right Israeli groups at the end of a march during which they harassed Palestinians and chanted: “Death to Arabs”.
Hundreds of Palestinians have been wounded and dozens of others arrested in several days of violence.
The barricading of the area near the Damascus Gate in East Jerusalem’s walled Old City – a popular gathering place for Palestinians during the holy month of Ramadan – was also partly blamed for the nights of tensions.