Malaysia has no formal diplomatic ties with Israel and many in the country support the Palestinian cause, with thousands taking to the streets in December to protest when US President Donald Trump recognised Jerusalem as the Jewish states capital.
The Israeli delegation at the conference was led by David Roet, who used to be Israels deputy ambassador to the UN, and included other senior foreign ministry officials and a former minister, the Times of Israel reported.
"I have great hopes for good relations between our two countries in the future," he said in a tweet.
Opposition groups and Islamic NGOs attacked the government for allowing him to take part in the event, with Rais Hussin from political party Bersatu labelling it a "great disservice to the Palestinian cause".
"Israel will be very happy that this has happened," he told AFP.
But Foreign Minister Anifah insisted Malaysia had been compelled to allow Israel to participate, noting the letter of invitation to the Jewish state was not signed by any Malaysian official.
"The issue of Malaysia tacitly establishing links with Israel through the hosting of this forum does not arise," he said in a statement.
"Our position on Israel remains unchanged. To imply otherwise is an indication of malicious and malignant intent."
Malaysia has previously stopped Israelis from entering the country for international events.
In 2015 two Israeli windsurfers were denied visas for a competition on the holiday island of Langkawi, forcing them to withdraw from the event.
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