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The Prime Minister, on an official visit to Italy and France, was scheduled to meet with Mitchell on Thursday in Paris.
The American envoy instead will meet with Defense Minister Ehud Barak during Barak's trip to Washington next week.
The official explanation for the cancellation was the need to "clarify issues."
Prime Minister Netanyahu directly challenged U.S. President Barack Obama’s stand against the presence of Jews in Judea and Samaria in his speech 10 days ago at Bar-Ilan University. He voiced determination to continue building in existing Jewish communities in Judea and Samaria, but hoped to dampen the American response by expressing willingness to accept a "demilitarized Palestinian state."
Instead, he has been met by more extreme resistance from the Obama administration. A U.S. State Department spokesman told reporters on Monday that opposition to building for Jews in Judea and Samaria includes established Jewish neighborhoods in Jerusalem, where thousands of housing units are under construction.
These areas of Jerusalem, in which more than 250,00 people live, were established up to 40 years ago after the entire city was restored to Jewish sovereignty during the Six-Day War. The neighborhoods were officially annexed to Jerusalem nearly 30 years ago.
Prime Minister Netanyahu has warned in recent days that making a loud fuss over the "settlements" clouds what he considers major issues towards a peace agreement between Israel and the PA.
Even if Washington wants to find a compromise solution, President Obama’s announcement in his speech in Cairo earlier this month has left the Arab world assuming that the U.S. is in its corner.
The Arab world has made it clear that it will not consider any compromise in the so called Arab Peace Plan, which calls upon Israel to surrender all of Judea and Samaria, including the Old City and Jerusalem neighborhoods, such as French Hill, Ramot and Gilo.