Fuad Massoum, the chairman and the chief organizer of the conference, said the cancellation came at the request of the United Nations to allow for more Iraqis to take part.
"The United Nations has asked us to postpone the conference for two weeks to continue the negotiations with the different sectors of the Iraqi society and to discuss the issues that will be tackled by the conference," Massoum said.
Observers, however, also cite the continuing poor security situation in the country. A truck bomb on 28 July north of Baghdad killed some 70 people, the worst single attack since the U.S. transferred sovereignty to Iraq on 28 June.
Some 1,000 delegates were expected to attend the conference to select a 100-member National Council, which will monitor the interim government until elections are held in January.
Observers say conference organizers did not manage to ensure the participation of major groups that opposed the U.S. occupation. The Association of Muslim Scholars, an influential Sunni organization, rejected an invitation to participate. Another Sunni party, the Iraqi Islamic Party, also decided to keep away, calling the conference "fixed."
Muqtada al-Sadr, the Shi'a leader who led an uprising against the coalition forces across much of southern Iraq this April, also refused to send representatives.
U.S. Secretary of State Colin Powell, speaking yesterday in Saudi Arabia, said delaying the conference was a good idea.
"We've been discussing this for several days with Iraqi Interim government officials and the United Nations and in the last several days it started to look like it might be better to delay it for a while to make sure we will do it right rather than do it in haste and so I'm confident it will go ahead," Powell said.
While officials downplayed security as a reason for the delay, analysts say it was certainly an important factor.
"A huge number of people going to meet in one hall for three days, in a well-known place," said Mustafa Alani, a regional expert at the Royal United Services Institute in London. "Really it is an easy target for a suicide bomber, for a mortar attack, for a rocket attack. I think the question here is basically that unless there are assurances on security, I don't think that there is a possibility that this meeting is going to take place soon."
Alani said he thinks the two-week delay will not be sufficient to see a major improvement of the security situation: "I think the security situation will not improve in two weeks if that's the reason [for the delay]. If the reason is to convince the other non-participants to participate, I believe they will still face difficulties. So, we're possibly talking about a series of postponements."
Alani said one way or another, the delay is a setback for the democratic process: "Certainly it is [a setback]. But the question is that the priority should go to security before asking for democracy. People want to live in a secure environment before they ask for their rights, democratic rights."
The conference, whose date was set as July in UN Security Council Resolution 1546, is now expected to start on 15 August.