Following the establishment of diplomatic relations by Costa Rica with what it calls "The State of Palestine" on 5 February 2008, the Israeli authorities have decided to postpone a meeting between Costa Rican president Oscar Arias and Israel's deputy minister of foreign affairs Majalli Whbee.
The meeting was due to take place on Wednesday.
Agreement between Costa Rica and the Palestinian Authority was reached in early February by Palestinian observer to the United Nations, Riyad Mansour, and Costa Rica's ambassador to the UN, Jorge Urbina.
The Institute for Middle East Understanding says that about 100 nations recognise 'Palestine' as a state and maintain diplomatic relations with the Palestinians.
Under the government of Oscar Arias, a Nobel Peace Prize winner, Costa Rica has established diplomatic relations with 16 countries, half of them from the Arab world.
Among the countries are Egypt, Bahrain, Jordan, Kuwait, Lebanon, Yemen, Oman and the Palestinian Authority.
The establishment of diplomatic relations followed Costa Rica's transfer of its embassy in Israel from Jerusalem to Tel-Aviv.
Costa Rica and El Salvador were the only two countries to have their embassies in the city of Jerusalem, disputed by Israelis and Palestinians as their capital city.
Israel claims Jerusalem is their capital, while most countries do not formally recognise the claim.
Following the election of Oscar Arias in 2006, the Costa Rican embassy was moved to the city of Ramat Gan in the Tel-Aviv district and El-Salvador's embassy to the city of Herzliya Pituach, north of Tel-Aviv.
Meanwhile, the American Jewish Committee (AJC) an organisation founded in 1906 with the aim of rallying all sections of American Jewry to defend the rights of Jews all over the world, expressed dismay at the decision of Costa Rica's decision to establish relations.
"The timing of this decision is both odd and painful," said the executive director of the AJC David Harris in a statement on the organisation's website.
"Odd, because there is not yet a Palestinian state, painful because this action comes less than two years after President Oscar Arias moved his country’s embassy out of Jerusalem, ending Costa Rica’s long-standing and courageous example of maintaining its embassy in Israel’s capital city."
Front Page Features