Cancel previous operations in user defined function

Question

Is it possible to cancel previous operations in a user defined function?

For example:

CREATE OR REPLACE FUNCTION transact_test () RETURNS BOOLEAN
AS $$
    BEGIN

        UPDATE table1 SET ...

        UPDATE table2 SET ...

        IF some_condition THEN
            --Here is  possible to cancel  all above operations?
            RETURN FALSE; 
        END IF;

        RETURN TRUE;
    END;
$$
LANGUAGE plpgsql;

Answer 1

Both answers so far are incorrect.
If you try to start a transaction or use a SAVEPOINT inside a plpgsql function you get an error message like this:

ERROR:  cannot begin/end transactions in PL/pgSQL
HINT:  Use a BEGIN block with an EXCEPTION clause instead.
CONTEXT:  PL/pgSQL function "f_savepoint" line 6 at SQL statement

If you try a SAVEPOINT inside a plain SQL function:

ERROR:  SAVEPOINT is not allowed in a SQL function
CONTEXT:  SQL function "f_savepoint2" during startup

As the error message instructs, use a BEGIN block inside a plpgsql function instead. Your demo could look like this:

CREATE OR REPLACE FUNCTION transact_test(boolean)
  RETURNS boolean AS
$func$
BEGIN -- start a nested BEGIN block
    UPDATE t SET i = i+1 WHERE i = 1;
    UPDATE t SET i = i+1 WHERE i = 3;
    IF $1 THEN
        RAISE EXCEPTION 'foo';  -- cancels all of the above
    END IF;

    RETURN TRUE;

EXCEPTION WHEN OTHERS THEN
    RETURN FALSE; 
    -- do nothing
END
$func$ LANGUAGE plpgsql;

-> SQLfiddle demonstrating it all.