"There is no hope for her release at the moment," party secretary U Lwin said on Friday after opposition officials met the Nobel laureate at her home where she is under house arrest.
The National League for Democracy (NLD) had made her freedom, and that of Vice Chairman Tin Oo, a key condition for joining Monday's convention, organised by the military
government which has ruled Myanmar in various guises since a 1962 coup.
The junta also refused to allow NLD offices to reopen nationwide after they were shut in a government crackdown in May last year when Suu Kyi, 58, was detained.
"The NLD does not believe that it will benefit the country in any way if it took part in the National Convention under these conditions," party Chairman Aung Shwe said.
In a statement issued on Friday night, the government said the convention would go ahead even without the NLD's participation.
Diplomats and critics say the talks will have no legitimacy if the NLD leader remained confined, and her party - which won a 1990 election by a landslide but was denied power by the junta - played no part.