Saudi Arabia is particularly angry about free trade deals other Gulf Cooperation Council (GCC) members have signed with the United States.
"Crown Prince Abd Allah will not participate in the summit. The Saudi delegation will be headed by Foreign Minister Prince Saud al-Faisal," an official said on Sunday.
He did not give the reason for the crown prince's boycott, but the news comes amid objections by Riyadh to a free trade accord signed in September between Bahrain and the United States.
Other members of the GCC, which apart from Bahrain and Saudi Arabia groups Kuwait, Oman, Qatar and the United Arab Emirates, plan to sign similar deals, which could further alienate Riyadh.
Sultan to attend
In place of Crown Prince Abd Allah, Saudi Defence Minister Prince Sultan bin Abd al-Aziz, who is number three in the Saudi hierarchy, is to head Riyadh's delegation to the summit, according to a Gulf official in Manama and a statement issued by the royal court in Riyadh.
Bahrain recently signed a free
trade pact with the United States
Bahraini Information Minister Nabil al-Hamr said four other GCC members were involved in negotiations with the United States to conclude free trade agreements, leaving Saudi Arabia as the only member of the alliance not engaged in such talks.
Efforts are under way to "convince Saudi Arabia that those accords, far from being detrimental, serve the interests of the Gulf states", al-Hamr said.
Saudi Arabia, the regional heavyweight, had accused its smaller Gulf neighbours of weakening Gulf solidarity by forging separate economic and security agreements with foreign powers.
But al-Hamr said that Saudi Arabia was now only voicing reservations about the deal.
Saudi Arabia is the only GCC state that is still not a member of the World Trade Organisation.
Though Bahrain has traditionally enjoyed close ties with Saudi Arabia, it went ahead with the free trade deal despite Riyadh's objections, which may have been behind the suspension in July of a donation of 50,000 barrels per day (bpd) of oil to Manama.
Bahraini officials had publicly stated in October that the cancelled oil donation was not linked to the row over the US trade deal.
GCC states launched a customs union in January 2003 and plan to establish a monetary union next year, a common market in 2007 and a single currency by the start of 2010.