A key South Asian summit scheduled to take place next month was called off by Nepal on Sunday, after diplomatic and military tensions between India and Pakistan threw its fate into doubt.
The South Asian Association for Regional Cooperation (SAARC) summit, which Nepal currently chairs, had been scheduled for November 9 and 10 in the Pakistani capital Islamabad.
But plans began to fall apart last week when India announced that it was pulling out of the summit, after accusing Pakistan of backing insurgents who carried out a deadly attack on its army base in the disputed Kashmir region.
Afghanistan, Bangladesh, Bhutan and Sri Lanka then said they would not attend. According to its charter, the summit cannot formally take place if even just one of the eight members withdraws.
Nepal's ministry of foreign affairs said in a statement Sunday that it "regrets that the regional environment is not conducive" to hosting the summit.
The ministry said it had spoken with officials in host nation Pakistan before making its decision.
Nepal said it would continue its efforts to hold a summit with all members participating, although it offered no details about its plan going forward.
Relations between New Delhi and Islamabad have deteriorated since the attack on an Indian army base in Kashmir killed 18 soldiers on September 18. India accused Pakistan of backing insurgents who carried out the attack, a charge Islamabad denies.
Then on Thursday India claimed it had carried out "surgical strikes" against militants in Pakistan-controlled Kashmir.
Both countries claim the entire region and have fought two wars over it since their independence from Britain in 1947.
The Maldives and Sri Lanka make up the remaining members of the regional bloc, which was founded in 1985 to foster regional cooperation but has often been marred by tensions between Pakistan and India.
In 1999, India cancelled a SAARC summit following a major conflict with Pakistan in the Kargil region in Kashmir.