Iqbal was scheduled to perform at a concert in Durban on New Year eve, where thousands of South African-Indians have converged for the current holiday season.
According to the event promoter Dalip Rajcoomar of Golden Jewellers, tickets were already sold out for the show when Zafar advised him late last week that he would rather postpone it for a future date than appear to be partying in South Africa when his countrymen were in mourning.
The Taliban attack on the army-run school in Peshawar on December 16 had killed 150 people, mostly children.
Zafar confirmed his strong views on the massacre in Peshawar by replacing his picture on his social networking profiles with a black square to mourn those who died in the attack.
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"Whatever happened is heartbreaking and my heart bleeds to see this degree of inhumanity," Zafar said.
Earlier, Zafar had said in advertisements placed on television that he was looking forward to coming to South Africa for his first public show.