Inability to reach agreement on the transfer of frozen tax payments to the Palestinian Authority or a cease-fire in the West Bank was the reason behind the last-minute cancellation of Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas's planned meeting Thursday, Palestinian and Israeli officials said Wednesday. According to the Prime Minister's Office, officials from Abbas's office called Olmert's bureau on Wednesday and said that the meeting - the first between the two leaders since April 14 and the first ever that was to be held in the PA - was off. The meeting was to take place in Jericho. Palestinian officials said Israel rejected demands to release hundreds of millions of dollars in frozen Palestinian tax revenues or accept Abbas's proposal for restoring a collapsed cease-fire in the Gaza Strip and extending it to the West Bank. "Israel is not responding positively to these demands so the president decided not to go to this meeting," Palestinian Foreign Minister Ziad Abu Amr told a news conference in Ramallah. Sources in the Prime Minister's Office said that despite the cancellation of the meeting, contacts were continuing between Olmert and Abbas's offices. They said that no date for a new meeting was set. Abbas's cancellation of the meeting underlines growing apprehension in Jerusalem that he is too weak of a leader to be able to carry out any commitments, an Israeli concern expected to be discussed when Olmert meets US President George W. Bush in Washington later this month. Abbas and Olmert agreed at US Secretary of State Condoleezza Rice's last visit here in March that they would begin holding biweekly talks and discuss their visions of how a future Palestinian state would look - so called "political horizon issues." Since that time, however, they have only met once. According to Israeli officials, Jerusalem would not agree to a Palestinian demand that a cease-fire in the south be linked to extending that cease-fire into the West Bank, saying that the daily IDF military activity in Judea and Samaria is essential to keeping terrorism from returning to the levels felt during the height of the second Palestinian intifada. Regarding the transfer of the frozen tax funds, Olmert - according to government officials - was willing to release some of the funds, but wanted to see a mechanism put in place that would ensure the money would not be used by the Hamas-led PA for terrorist purposes. The officials said that Israel was not satisfied with the mechanism set up to channel the $100m. in frozen tax funds that Israel transferred to Abbas earlier this year. In lieu of the Olmert-Abbas meeting, the Palestinian Authority foreign minister said the Quartet - made up of the US, EU, Russia and the UN - invited Abbas and Olmert to a Quartet meeting in Egypt on June 25. A spokesman in the Prime Minister's Office, however, said Olmert had not been invited to the Quartet meeting. Olmert, according to his office, discussed the postponed meeting during a phone conversation with British Prime Minister Tony Blair on Wednesday. According to a statement issued by Olmert's office, Blair condemned the recent calls for an academic boycott of Israel, saying those calls represented neither British public opinion nor the position of British universities. AP contributed to this report.