The UN human rights council in Geneva had been due to vote today on whether to pass the Goldstone report to the UN security council for further action.
That vote will now be delayed until the council meets next, in March next year.
Israel had strongly rejected the findings of the Goldstone report as biased, even though it also criticised the actions of Hamas.
The US administration said it had "very serious concerns" about Goldstone's recommendations, which included a call for the UN security council to investigate and raised the possibility of investigation by the international criminal court and judges from individual countries.
The Palestinians do not have a seat on the 47-member human rights council, but Arab and Muslim countries with council seats had been expected to push for the report to be endorsed.
The Palestinian reversal came after "intense diplomacy" by Washington, which told the Palestinians that going ahead with the vote would harm efforts to restart peace talks with the Israelis, according to diplomats quoted by news agencies.