The stunning turnaround after Netanyahu announced the accord in a televised address on Monday afternoon came as he faced mounting pressure from his right-wing base.
The UN refugee agency urged Netanyahu to reconsider.
Monday’s announcement drew immediate anger from right-wing politicians, including Netanyahu allies, and many of his traditional supporters.
After the deluge of criticism, the premier said in a late-night Facebook post on Monday he was suspending the agreement that would have allowed thousands of the migrants to remain in Israel at least temporarily.
On Tuesday, he said the deal was being cancelled outright after having held discussions on it.
“After having heard numerous comments on the agreement, I have examined the pros and cons and have decided to cancel the agreement,” Netanyahu said in a statement.
‘Playing with our minds’
The agreement was designed to end the possibility of forced deportations of thousands of migrants to Rwanda under a controversial plan put forward by Netanyahu in January.
Under the agreement with the UN, a minimum of 16 250 migrants would have instead been resettled in Western nations.
In return, Israel would grant temporary residency to one migrant for each one resettled elsewhere.
The presence of the primarily Sudanese and Eritrean migrants in Israel has become a key political issue, and Netanyahu is already under heavy pressure due to a string of graft probes.
He has repeatedly referred to them as “not refugees but illegal infiltrators”.
A range of Netanyahu’s own ministers spoke out strongly against the deal, with Finance Minister Moshe Kahlon saying he had known nothing of it until Monday.
On Tuesday morning, Netanyahu held talks with residents of southern Tel Aviv, where many of the migrants live. A group of southern Tel Aviv residents had harshly criticised the deal.
Dozens of migrants and their supporters also protested outside Netanyahu’s office in Jerusalem and in Tel Aviv.
“We thought that if we came here, there is democracy and Israel will defend our rights, but they are playing with our minds and our lives,” Sernai Dori, a 28-year-old mother of three from Eritrea who has been in Israel for a decade, said at the protest in Jerusalem.
‘Reconsider its decision’
The UN refugee agency meanwhile said it had found out about Netanyahu’s initial suspension of the agreement through news reports.
The agency, known as the UNHCR, said Tuesday it hoped Netanyahu would change his mind about the cancellation.
“We continue to believe in the need for a win-win agreement that can benefit Israel, the international community and people needing asylum and we hope that Israel will reconsider its decision soon,” spokesman William Spindler told AFP in an email.
Netanyahu said he was forced to resort to the deal with the UN after Rwanda indicated it would not be able to follow through on the previous plan.
Uganda, another country widely thought to be a destination for those deported, had also said it could not accept those sent involuntarily.
Under Netanyahu’s previous plan, migrants who entered illegally would face a choice between leaving voluntarily or facing indefinite imprisonment with eventual forced expulsion.
According to interior ministry figures, there are currently some 42 000 African migrants in Israel, half of them children, women or men with families who are not facing immediate deportation.
As the migrants could face danger or imprisonment if returned to their homelands, Israel had offered to relocate them to an unnamed African country, which deportees and aid workers had long said was Rwanda or Uganda.
Netanyahu specifically mentioned Rwanda for the first time in his Monday Facebook post.
The initial plan had drawn criticism from the UN refugee agency, rights groups and some Israelis, including Holocaust survivors who said the country had a special duty to protect migrants.
Migrants began entering Israel through what was then a porous Egyptian border in 2007.
The border has since been strengthened, all but ending illegal crossings.
© Agence France-Presse