The government has shied away from lifting a ban on the ritual slaughter of animals amid heavy pressure from animal rights and consumer groups.
The economics minister, Pascal Couchepin, said on Wednesday that the proposal to lift the ban on ritual slaughter had been rejected in the interests of "religious peace" and because of widespread opposition.
Ritual slaughter, banned in Switzerland in 1893, is the bleeding to death of animals that have not been stunned first. The method is used to produce kosher and halal meat.
However, the economics ministry said new legislation would be drafted to allow the import of kosher and halal meat into Switzerland.
The proposal to lift the ban was put forward by the House of Representatives, which argued that it represented an infringement of religious freedom.
Under the proposal, ritual slaughter would have been allowed only within certain religious communities and with the approval of cantonal authorities. Designated abattoirs would also have been used for the practice.
The proposal provoked a tide of opposition from a majority of cantons, animals rights and consumer groups as well as from veterinary surgeons and farmers, who argued that the practice inflicted suffering on animals.
The Swiss Animal Protection (PSA) launched a public initiative in January opposing the lifting of the ban, describing ritual slaughter as an "archaic form of torture".
The Swiss Federation of Israeli Communities said it was disappointed by the decision.
"We regret that it's not possible to discuss this question rationally," said Thomas Lyssy, the organisation's vice president. "But we understand the workings of the Swiss political system."
swissinfo with agencies