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A high-profile group of Jewish leaders has cancelled a gala event with Prime Minister Binyamin Netanyahu to protest his government’s decision to scrap plans for a mixed-gender prayer area at Jerusalem’s Western Wall.

The board of governors of The Jewish Agency, a nonprofit that works closely with the Israeli government to serve Jewish communities worldwide, has said on Monday that it was calling off its dinner with the prime minister.

It also altered the agenda of its meetings to address a crisis that has set off a cascade of criticism.

Comment: Call it what you wish, it amounts to Apartheid

The move reflects an unprecedented gulf that has erupted between Israel and the Jewish diaspora over how Judaism can be practiced in Israel.

Most American Jews belong to its more liberal streams and feel alienated by Israel’s ultra-Orthodox authorities that question their faith and practices.

'Safeguarding' Western Wall traditions

The deal to alter rules at one of Judaism's holiest sites was called off following pressure from ultra-Orthodox Jewish parties in Netanyahu's right-wing coalition.

Ultra-Orthodox coalition members Shas and United Torah Judaism said on Sunday that Netanyahu had accepted their position to "freeze" the plan, a move that "reflects the will of most of the nation that seeks to safeguard the Western Wall's sanctity and status".

Progressive Jewish activists had long sought to change the rule in the face of strong opposition from the ultra-Orthodox establishment, which oversees religious activity at the Western Wall.

In what was hailed a "historic" deal, Israel's cabinet had in January 2016 approved a plan to create a third section at the Western Wall where women and men would be allowed to pray together.

The new prayer section would not have been under the control of the ultra-Orthodox establishment, which opposed it and managed to prevent its implementation until this point.

Sunday's vote by the cabinet effectively cancelled the deal.