The draw for the men's FIFA Under-20 World Cup in Indonesia has been cancelled, officials said, days after Bali's governor called for Israel to be kicked out of the competition.

The two countries do not have formal diplomatic relations, and support for the Palestinian cause in the world's most populous Muslim-majority nation runs high, fuelling local opposition to hosting the Israeli team.

Fixtures for the 24-nation tournament beginning in May were due to be chosen on Friday in Bali, but FIFA cancelled the event without giving a reason or setting a new date, the Indonesian Football Association (PSSI) said in a statement Sunday.

Officials said a likely factor in the draw's cancellation was a call by Bali governor Wayan Koster for Israel to be banned over its policies towards Palestinians in a letter sent to the Ministry of Youth and Sports this month.

"The draw has been cancelled. We can understand that because there was a rejection from Bali's governor," PSSI executive committee member Arya Sinulingga told a press conference in Jakarta Sunday.

"Israel is a participant and the draw cannot be done without all participants."

FIFA did not respond to a request for comment.

Israel is due to take part in the tournament after qualifying for the first time, and Jakarta has pledged to protect its involvement.

Organisers had hoped hosting Israeli games on the Hindu-majority island of Bali would offer a buffer against local backlash, but Koster's opposition has cast that into doubt.

Around a hundred conservative Muslim demonstrators also marched in capital Jakarta this month to protest Israel's involvement.

Officials in Jakarta said they feared losing hosting rights to the country's first major tournament and being isolated by the world governing body if the situation was not resolved.

The country is also hosting the tournament under the cloud of one of the worst stadium disasters in the sport's history after 135 people died in an East Java stadium stampede in October.

Authorities have been trying to slowly rebuild the country's standing after FIFA suspended it from international football in 2015 for a year over government meddling in a domestic association.