The furor over a luxury hotel inauguration showed how easily bitter rivalry can flare up between Cypriots across the ethnic divide, even as the two sides are locked in fruitless peace talks.
Reports that Lopez would perform at a hotel in the breakaway Turkish north on her 41st birthday this month triggered a Greek Cypriot online campaign pushing for cancellation.
Greek Cypriots viewed Lopez's July 24 appearance as helping legitimize the Mediterranean island's violent division. Cyprus was split into a Greek speaking south and a Turkish speaking north in 1974 when Turkey invaded following a coup by supporters of union with Greece.
Turkish Cypriots declared an independent state in 1983 that is only recognized by Turkey, which maintains 35,000 troops there. Both sides have come closer in recent years, but hopes are fading that long-drawn peace talks can reach a reunification deal any time soon.
Cyprus joined the European Union in 2004, but the north remains out in the cold without direct flights or trade links with the outside world.
An official at the Cratos Premium hotel near the northern coastal resort of Kyrenia told The Associated Press that Lopez had signed a contract to perform as part of opening celebrations and would have arrived "with her friends and family." Reports said Lopez would earn a $3 million appearance fee.
Attempts by the Associated Press to contact Lopez' publicist and confirm details of the New York-born star's appearance went unanswered.
But a statement on the singer and actress' official website on Thursday said her advisers decided against her appearance after "a full review of the relevant circumstances in Cyprus."
"Jennifer Lopez would never knowingly support any state, country, institution or regime that was associated with any form of human rights abuse," the statement said. It added that it was a team decision "that reflects our sensitivity to the political realities of the region."
Greek Cypriots on Friday hailed Lopez's withdrawal as "a victory" and heaped praise on the star on social networking site Facebook.
One entry on a dedicated forum titled, 'Against Jennifer Lopez Performing in Occupied Cyprus' read: "Thank you Jennifer!! You are true champion of Morality, Human Rights, Democracy and Freedom!"
Greek-American groups such as the American Hellenic Educational Progressive Association weighed into the controversy, urging Lopez to call off the show.
The group's president, Nicholas Karacostas, called news of Lopez's Cyprus gig "sad and disheartening" and warned that her celebrity would be "used to lend credence to an illegal entity."
But the cancellation drew scorn from Turkish Cypriots, who saw it as part of a Greek Cypriot campaign to keep them isolated.
"Once again the Turks suffer from continued embargoes," said one post from the Facebook forum. "Jennifer Lopez is coming ... my Greek friends live with it."
Another said: "A very bad day for reunification chances. Might as well build a huge wall down the middle of the island."