Relations between Israel and Turkey remain strained since a major rupture in 2010, when Israeli soldiers killed nine Turks travelling in the Turkish-led flotilla headed for Gaza.
"I was going to attend the conference but we decided not to after they added Israeli officials to the Middle East session at the last minute," Cavusoglu told a news conference in Berlin, where he has been meeting Turkish ambassadors based in Europe.
Withdrawing from the meeting was nothing to do with Turkey's relationship with Germany, he said in the remarks broadcast by Turkish state television TRT.
Foreign Minister Avigdor Lieberman said the announcement "proves once again how enormous a mistake it was to apologize to Turkey," referring to Netanyahu's decision in 2013 to express his regret to Turkish President Recep Tayyip Erdogan for the flotilla incident.
"As long as the current leadership headed by Erdogan and his associates controls Turkey, there is no chance to rehabilitate relations between the two countries," added Lieberman. "Turkey under Erdogan is a state that is interested only in attacking and bashing Israel; and we must deal with it accordingly and stand up for Israeli interests."
Minister Yuval Steinitz, who is to head the diplomatic mission representing Israel at the conference, also criticized Turkey's decision. "Israel would like to express its astonishment over this move by Turkey. Israel will participate in any important international conference, in spite of Turkey's disapproval," he said.
"The Turkish boycott essentially means solidarity with radical Islam, and terrorist groups like the Muslim Brotherhood and Hamas, and more than harming Israel, it casts a long shadow over the future and character of Turkey."
Despite being major trading partners, Israel and Turkey - former allies - frequently engage in bitter verbal exchanges.
President Tayyip Erdogan, an outspoken advocate of the Palestinian cause, last year likened the actions of Israel to those of Hitler, in comments that led Israeli Prime Minister Benjamin Netanyahu to accuse him of anti-Semitism.
Last month Turkish Prime Minister Ahmet Davutoglu in turn likened Netanyahu to the Islamist militants who killed 17 people in Paris, saying both had committed crimes against humanity.
Itamar Eichner contributed to this report.