"We deeply regret that the Libyan president cannot come," the Antara news agency quoted Indonesian official Muhyiddin Junaidi as saying on Friday.
"His main reason is the Indonesian government did not give him permission to deliver a sermon during the Friday prayers at the Istiqlal mosque."
Indonesian President Susilo Bambang Yudhoyono had initially approved al-Qadhafi to deliver the sermon in Southeast Asia's largest mosque, but changed his mind after Religious Affairs Minister Maftuh Basyuni objected, Antara cited Muhyiddin as saying.
Officials at the Libyan embassy confirmed that al-Qadhafi would not be coming but refused to give any reasons.
Indonesian foreign ministry officials were not immediately available for comment.
The summit opened on Friday in the Indonesian capital, drawing together leaders and representatives of 80 nations.