|William Hague, the UK foreign minister, has arrived in the region for talks with Israeli and Palestinian leaders [Reuters]
Israel has postponed all strategic dialogue with Britain in protest at a law which allows UK courts to prosecute visiting Israeli officials for alleged war crimes.
Strategic dialogue between the two countries takes place annually and focuses on defence and security issues.
"The strategic dialogue has indeed been postponed," Yigal Palmor, a foreign ministry spokesman, said on Wednesday.
The development came as William Hague, the British foreign minister, arrived in Israel for a two-day visit on Wednesday.
"The visit by foreign minister Hague is an important phase in the ongoing exchange between the countries and the question of Israeli officials being unable to travel to Britain will be on the top of the agenda as far as we are concerned," he said.
The law in question gives British courts "universal jurisdiction" to issue warrants against individuals accused of war crimes, including visiting foreign politicians.
Sherine Tadros, Al Jazeera's correspondent in Jerusalem, said that this issue was top on the agenda for Hague's visit.
"This is something that is vital for Israel and they are not happy how, time and time again, its' officials have to cancel trips to the UK because of fear of being arrested for war crimes," she said.
"The UK has said that this law needs to be changed but the question for Israel is when will the change happen."
Earlier this week, Dan Meridor, Israel's intelligence minister, cancelled a trip to London over general concerns he risked being arrested, with local media speculating it was in connection with Israel's deadly raid on a Gaza-bound aid flotilla in May.
Britain's embassy in Tel Aviv confirmed that the government was taking the issue very seriously and said that a draft amendment to the law would be put before parliament "in the coming weeks".
"The British government understands that we have a real problem and we are dealing with it," spokeswoman Karen Kaufman told AFP, saying it would take "several months" before any amendment was passed.
"We will present a draft (amendment) in the coming weeks with the goal of passing it in this current sitting of parliament," Kaufman was quoted as saying.
This year's strategic dialogue meeting, which had been expected to take place in Britain last month, did not happen, a diplomatic source said.
But a spokesman for the prime minister's office refused to comment on the issue, saying: "We don't talk about strategic dialogue. It's a sensitive issue."
Israel has been pushing for Britain to amend the legislation for five years after a number of high-profile political and military officials were forced to cancel visits over arrest fears.
In January, Gordon Brown, Britain's then Labour prime minister, pledged to change the law after Israeli opposition leader Tzipi Livni, who was foreign minister during the 2008-9 war on Gaza, cancelled a trip after a warrant for her arrest was issued, provoking a diplomatic spat.
In an interview with Israeli newspaper to coincide with his first visit to Israel as foreign secretary, Hague said it would be prudent for Israeli officials to wait for the law to be amended before visiting Britain.
"I think it would be wise to first pass this law and then invite them," Hague said.
Hague arrived in Israel late on Tuesday for talks which were expected to focus on helping Israel and the Palestinians break the deadlock in peace negotiations.
Talks were suspended in late September after the expiry of a moratorium on Jewish settlement building in the occupied West Bank.
Israel has refused to reimpose the moratorium, while the Palestinians say they will not hold talks while settlers are building on Palestinian land, prompting a flurry of diplomatic efforts to break the impasse.
Our correspondent said that among the scheduled meetings, one was centred around the Iranian nuclear row.
"Sources are saying that Israel is trying to find out whether sanctions are biting Iran," Tadros said.
"The Israelis will probably say that they are not and try to push for more pressures against Iran."