The meeting was stalled on Monday, after talks deadlocked over Israeli troop withdrawals in the West Bank and Palestinian prisoner releases.
Israeli officials were not immediately available to comment on the postponement of the meeting on Tuesday, which was to have been the first between the two leaders since Israel's Gaza Strip pullout.
On the Gaza-Israel border, meanwhile, Israeli troops shot and killed three Palestinians who had crawled towards the border fence with a bag. Palestinian security officials said the three were unarmed.
A Palestinian Health Ministry official said they were labourers trying to enter Israel to find work, and that their bags contained food and clothes.
Postponement of the Sharon-Abbas meeting was widely expected after senior Israeli and Palestinian negotiators failed to bridge differences in three separate sets of talks, including a round on Monday.
"There was not enough preparation for this summit ... to be held tomorrow," Palestinian official Nabil Abu Rdeneh said. "So it has been postponed until the end of the month, or the beginning of next month."
Abu Rdeneh said the sides would continue in the coming weeks to prepare for a meeting.
Mofaz is opposed to the return of
West Bank towns to Palestinians
A 2 October meeting had been cancelled after the Palestinian resistance bombarded southern Israel with rockets, and Israel retaliated with a military offensive.
Although Israel and the Palestinians would benefit from a summit showing progress towards peace after the Gaza pullout, Israel balked at making gestures it said would harm its security.
The Palestinians want Israel to honour its commitment to turn over four more West Bank towns to Palestinian control, and to release some of the more than 7000 Palestinian prisoners it is holding.
Israel is prepared in principle to free some prisoners, but has not presented the Palestinians with any specific proposals regarding the number it is willing to free, or whether it would release prisoners involved in attacks on Israelis, said Palestinian Cabinet Minister Sufian Abu Zayda, Abbas' point man on prisoner issues.
"Israel is talking in general, not talking about numbers and criteria. That's not enough for the Palestinians," Abu Zayda said.
"[Abbas] would have a lot of difficulty meeting with Sharon without having convincing answers"
Sufian Abu Zayda,
Palestinian Cabinet Minister
"The issue of the prisoners is one of the most important issues in terms of Palestinian public opinion," he added. Abbas "would have a lot of difficulty meeting with Sharon without having convincing answers," he said.
West Bank towns
As for the handover of West Bank towns, the defence ministry said on Sunday that Defence Minister Shaul Mofaz objected to further transfers in conjunction with the meeting.
Israel agreed to the pullback as part of a February ceasefire.
But the process stalled after two towns, Jericho and Tulkarim, were handed over, with Israel accusing the Palestinians of failing to take action against resistance fighters in those towns. Israel later retook Tulkarim after a bomber from the area attacked an Israeli city.
Because of the differences, Palestinian negotiator Saeb Erekat acknowledged that the summit might not be held on Tuesday, but said there was no crisis. "Even if we move the summit from tomorrow, it is a positive atmosphere, and it's an attempt to have a successful summit," he said.
Palestinians said there was no point in a summit just for the pictures, and that concrete results were needed. Abbas himself came under criticism in 2004 when he was prime minister under the late Yasser Arafat for meeting Sharon but coming away empty-handed.
Abbas is to travel to Washington later this month to meet US President George Bush, and he would have been reluctant to arrive without any concrete achievements from a meeting with Sharon.
Erekat believes talks will be held
in a positive atmosphere
Sharon told his cabinet on Sunday that he did not know if the meeting would take place, stressing that he would not make moves that he believed threatened Israel's security.
"There are gestures that Israel can and will make, and there are gestures that it won't," he said, according to meeting participants.
The two sides have made progress on other Palestinian demands in recent days, with a compromise possibly shaping up on reopening Gaza's border with Egypt.
Israel closed the Rafah terminal - the main exit out of Gaza - before the withdrawal. The Palestinians say reopening the border is essential for Gaza's ravaged economy.
Israel reopened a cargo crossing on its border with Gaza on Sunday, and Palestinians said this would alleviate a shortage of fruit and dairy products in the territory.
The Karni passage and others with the Palestinian area had been closed almost continuously since 24 September, after dozens of rockets were fired from Gaza into Israel in response to the killing of 15 Palestinians at a Hamas rally.