"The establishment of an Israeli pavilion at Cannes 2015 corresponds with the blossoming and prosperity of Israeli cinema," said then-culture minister Limor Livnat at the time.
Iran and Jordan were newcomers this year at the Village International, the world's largest film market.
Although Israeli films have been increasingly visible on the international scene, with four Academy Award nominations over the last decade and countless festival screenings, this fact was not apparent what is widely considered the world's most prestigious film festival.
According to David Alexander, chairman of the Israeli Film Council, the root cause of Israel's absence was the decision to hold early elections, which caused funding problems.
"In the absence of a state budget, it was not possible to meet the tight timetable of demanding commitments required to create the pavilion this year," said Alexander.
"Therefore, we apologized to the festival's management and received its promise that our place would be saved for next year. We are currently beginning work on planning the tent and its contents for 2016."
The Village International at the Cannes Festival has been in existence since 2000, and its stated goal is to connect producers and entrepreneurs from around the world.
The area is dedicated to the goals of the cinematic institutions representing the various countries: promotion of local films and directors, but also showcasing shooting locations and other services on offer.
The Culture Ministry is aware of the important opportunities provided by representation at the Village, saying in January that the planned pavilion would "allow those engaged in Israel's film industry, particularly producers, directors of film foundations, and film directors, to present new cinematic projects and work to promote collaborations with other countries."
Former culture minister Limor Livnat declined to comment.