Israel is believed to be the only nuclear-armed power in the Middle East but has never confirmed or denied that it possesses atomic weapons.
It has also not signed the Nuclear non-Proliferation Treaty (NPT).
"The prime minister has decided to cancel his trip to Washington to attend the nuclear conference next week, after learning that some countries including Egypt and Turkey plan to say Israel must sign the NPT," Reuters quoted an unnamed official as telling reporters.
According to Israeli media, Netanyahu's chage of mind followed fears that countries attending the summit would try to shift its focus from nuclear terrorism to a concerted attack on his country's presumed nuclear weapons capacity.
Earlier this week, announcing his initial intention to fly to Washington, Netanyahu told a Jerusalem news conference that he did not expect to face pressure over Israel's nuclear programme.
"I'm not concerned that anyone would think that Israel is a terrorist regime," he said.
"Everybody knows a terrorist and rogue regime when they see one, and believe me, they see quite a few around Israel."
Netanyahu's decision to pull out of the talks comes at a tense time in US-Israel relations, following a particularly frosty row over Israel's construction of settlements in East Jerusalem and its approach to the Middle East peace process.
Obama and Netanyahu held talks on the issue at the White House last month, but failed to make any progress.
Al Jazeera's correspondent Jacky Rowland, reporting from Jerusalem, said that "Israel remains very sensitive about whether it does or does not possess a nuclear programme".
"However, when Israel attends any international forum, it is very happy to take the floor and talk about Iran's nuclear programme, and warn the world about what it sees as the 'Iranian nuclear threat'", she said.
|Israel has never confirmed or denied that it has developed nuclear weapons [EPA]
"But when other countries discuss Israel's nuclear capabilities and how they see it as a problem, it could be embarrassing for the prime minister to be present, which is possibly why he has decided to stay away."
Although the gathering of 47 countries at the nuclear security summit will not focus on individual nations, the nuclear programmes of Iran and North Korea - and possible new UN sanctions against Tehran - are expected to be discussed in Obama's bilateral meetings with various leaders attending the meeting.
Among those expected to attend the summit are Hu Jintao, the Chinese president, Dmitry Medvedev, the Russian president, Nicolas Sarkozy, the French president and Angela Merkel, the German chancellor.
Also represented will be India and Pakistan, which never signed the NPT but have atomic arsenals.
The inclusion of Pakistan, diplomats say, is important since it is one of the countries that has pledged to improve its internal safeguards over its nuclear weapons.
Two nations excluded from the meeting are Iran, which the United States and its Western allies accuse of pursuing nuclear weapons, and North Korea, which withdrew from the NPT in 2003 and has twice tested nuclear devices.