The ruling body that organises the men's team competition said that "while the military conflict seemed to be slowing down, there was no certainty that this would be the case at the time of the tie that is due to take place in five weeks".
The Davis Cup committee said in a statement it "felt that its first priority was to ensure the safety of the players, officials and the public, and regretfully decided that the tie would not be held in Israel as originally scheduled."
Israel has been given until next Thursday to nominate an alternative venue to host the September 12-14 tie. Venues in eastern Europe, the United States or Canada are seen as possible options, a spokeswoman for the Israeli Tennis Association said.
A month of fighting between Israeli forces and Islamist militants in the Gaza Strip has wound down. Officials in Cairo are trying to extend an initial 72-hour ceasefire that is due to end at 8 am (0600 BST) on Friday.
Gaza officials say the war has killed 1,874 Palestinians, most of them civilians. Israel says 64 of its soldiers and three civilians have been killed since fighting began on July 8, after a surge in Palestinian rocket salvoes into Israel.
On Monday, the inaugural $1 million ATP Israel Open that had been scheduled to be held in Tel Aviv was cancelled by the governing body of men's tennis because of the Gaza conflict.
The ATP World Tour 250 event, which was due to take place from September 15-21, would have been the first high-profile men's tournament to be held in Israel since 1996.
European football's governing body, UEFA, last month barred Israeli clubs involved in continental competitions from hosting matches on home soil, and they have been moved to Cyprus.
- Politics & Government
- Unrest, Conflicts & War