Minutes after the Britons were withdrawn from the Jericho Monitoring Mission, Israeli troops stormed the prison compound to seize Palestinian prisoners held over the assassination of an Israeli minister.
The raid sparked a wave of violent demonstrations against British and US targets and an ultimatum from Palestinian fighters for their nationals to leave immediately.
Straw said in a statement to the House of Commons on Tuesday: "It is the prime responsibility of the Palestinian Authority to ensure the personal security of the United States and United Kingdom monitors.
"Over the last months it has become increasingly clear that the Palestinian Authority is unable to do this.
"The UK and the US have repeatedly raised our concerns over the security of our monitors with the Palestinian Authority and urged them to meet their obligations under the Ram Allah agreement.
Letter to Abbas
"Unfortunately, there has been no improvement. We therefore issued a joint US/UK letter to President [Mahmoud] Abbas on 8 March 2006.
"This letter said that we would have to terminate our involvement with the mission if the Palestinian Authority did not immediately either fully comply with the Ram Allah Agreement [which sets out monitoring arrangements] and make substantive improvements to the security of the monitors or come to a new agreement with the government of Israel.
Israeli troops have stormed the
Jericho prison compound
"As required by the Ram Allah Agreement we informed the Israeli authorities that we were delivering a letter in these terms.
"The Palestinian Authority has consistently failed to meet its obligations under the Ram Allah Agreement. Ultimately the safety of our personnel has to take precedence.
"It is with regret that I have to inform the House that these conditions have not been met and we have terminated our involvement with the mission today, 14 March."