"The Israeli embassy is sad to announce the suspension of the match between the Israel and Argentina national teams scheduled for Saturday June 9, as a warm-up for the Russia World Cup", an Israeli embassy statement read.
A senior source at Argentina's Football Federation, who was speaking on condition of anonymity, told The Associated Press on Tuesday that the game had been called off.
"They've finally done the right thing", Higuain said in an interview.
"This proves Argentina understands there is nothing friendly about playing in Jerusalem, when just miles away Israelis snipers are shooting unarmed protesters", said Alice Jay, campaign director at Avaaz.
Palestinian FA chief Jibril Rajoub wrote to Claudio Tapia, the head of the Argentinian FA, last week accusing Israel of using the match as a "political tool".
"But we have a good group of players and the Argentine team is always going to be a candidate to win, it doesn't matter how we get there".
Responding to the cancellation of the game, Regev, the culture and sport minister, said early Wednesday that Argentinian players had received threats from "terror groups".
The cancellation of the game is being viewed as a major victory for BDS, which seeks equal rights for Palestinians. Jorge Faurie did not confirm the game had been axed, but told reporters in Washington on the sidelines of the Organization of American States meeting that he believed players had been reluctant to travel to Israel to play.
The news was met with cheers in Gaza, where at least 120 Palestinians were killed by Israeli forces during recent protests.
"The Israeli government is trying to give it political significance by insisting it be held in Jerusalem".
On Sunday he called for Palestinians to burn replica shirts and pictures of Messi.
Palestinians are outraged at US President Donald Trump's decision last December to recognise Jerusalem as Israel's capital, breaking with decades of policy, and move his country's embassy there. "We ask him not to participate in laundering the crimes of the occupation", he added.
"For us it is unacceptable to hold this game in Jerusalem because it is occupied territory, and it is painful to see that the team, which has the love and support of so many Palestinians and Arab citizens, support the violation of global law", he said.