Palestinian Minister for Negotiation Affairs Saib Uraiqat on Sunday said the postponement would encourage Israel to increase its attacks against Palestinians.
"I am afraid that this will bring dangerous consequences since it comes after the assassination of Shaikh (Ahmad) Yasin and the US using the veto in the (UN) Security Council (against a draft resolution) condemning the assassination," he said.
"We are afraid that this will allow Israel to carry out even bigger or large-scale actions against the Palestinians."
"We know the Arab divisions are not new and we should not really exaggerate this too much as the divisions have existed for a long time," said Uraiqat.
Arab leaders have universally condemned Israel's killing of Shaikh Yasin and the Palestinians had been hoping that the summit in Tunis would serve to increase the diplomatic pressure on the Israelis.
By putting off the summit Arab leaders have failed to rise to the challenge posed by Israel's assassination of Hamas spiritual leader Shaikh Ahmad Yasin, said the new leader of the Palestinian resistance group, Abd al-Aziz al-Rantisi.
Al-Rantisi is disappointed with
"We are sorry about this decision," said al-Rantisi on Sunday.
"We were hoping that the Arab nations would rise to the challenge but we have seen them pull back," he added.
"The time is coming for the Arab leaders to be united so that all Arab nations can grow strong again," he said.
However Israel said the cancellation was a "positive sign" that the Arab world is in the throes of change.
"It is a postive sign which shows that the Arab world is changing and that hostility to Israel is no longer a sufficient common denominator," said an Israeli official, speaking on condition he not be named.
"Arab union has always favoured extremists," he added, linking the postponement to "the crisis in the Arab world following the US intervention in Iraq."
Arab League Secretary General Amr Musa warned that the failure would have "dangerous consequences" for Arab unity.
Musa said in a statement on Sunday that all Arab countries -not just Tunisia - shared the responsibility for the unprecedented cancellation ordered by the summit host, Tunisian President Zain al-Abidin Bin Ali.
"The situation is serious and immediate action must be taken," he added.
"We are afraid that this will allow Israel to carry out even bigger or large-scale actions against the Palestinians"
minister for negotiation affairs, Palestinian Authority
In Baghdad, Iraq's US-installed interim leadership on Sunday expressed regret, saying the cancellation had robbed it of an opportunity to explain the transition process under way in Iraq.
The interim Governing Council had pinned great hopes on the summit "sending a high-ranking delegation to inform Arab leaders about details of the political process, including the elections and the transfer of power," prominent council member Muaffak al-Rub said.
"There is a need for an Arab summit. This could have consequences," he said.
Tunisia stunned Arab foreign ministers late on Saturday by calling off the Arab summit it was to host from Monday, a move it said resulted from their failure to include Tunisian changes to a plan on Arab political reform.
Egypt stepped in to say it would host a new summit. "Egypt welcomes holding a summit conference in the country of the (Arab League) headquarters at the earliest time that can be agreed," said an Egyptian presidency statement.
The headquarters of the 22-member Arab League is in Cairo.