It is the standard fast food across the Middle East: balls of ground chickpeas tossed into vats of sizzling oil and served with pickles and salads inside a pitta bread.

But the ubiquitous family-owned falafel street stalls and small cafes faced a challenge earlier this year when McDonald's introduced the "McFalafel", the global burger chain's own version of the Middle East staple, in all its Israeli restaurants.

Now, in a rare admission of defeat, it is withdrawing the McFalafel, saying it was an experiment that did not work.

"We realised that falafel doesn't belong in McDonald's," Omri Padan, chief executive of McDonald's Israel told the news website Ynet. "We wanted a vegetarian dish … but it didn't succeed. The falafel dish is gradually being removed from the restaurants."

In a branch in West Jerusalem, the McFalafel was still on the menu on Tuesday, priced at 16.90 shekels (£3). Customers occasionally ordered it, said one server, although most preferred burgers.

Around the corner all three tables in Falafel Doron, a family-owned cafe open for 20 years, were taken. Dennis Kuchak, visiting Israel from Australia, said the idea of a McDonald's version of falafel did not appeal. "I wouldn't dream of eating it. McDonald's is a burger place," he said.

The Taylor family from Hertfordshire, in Jerusalem for a party, insisted they would only ever patronise a "traditional" falafel outlet. "It's street food, not pre-packaged," said Howard Taylor, ordering another plate of chips. "It's meant to taste like it's been cooked in the back room."

Doron, the cafe's proprietor, said he had tried a McFalafel and admitted it was good. Better than his own? "I don't know," he said. "McDonald's is McDonald's."

Falafel is thought to have originated in Egypt, although Israel now claims it as a national dish.