Recep Tayyip Erdogan had especially flown to Louisville in the southern US state of Kentucky to bid farewell to Ali, who the Turkish president is known to have admired hugely as a committed Muslim and civil rights campaigner.
Erdogan on Thursday attended a prayer ceremony for Ali and had been due to attend the funeral on Friday along with several other high profile political leaders.
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The Dogan news agency quoted presidential sources as saying funeral organisers refused to allow Erdogan to lay a cloth from the Kaaba - the cube-shaped structure at the centre of Islam's most sacred mosque - on Ali's coffin during the ceremony.
Erdogan and the Sunni cleric who heads Turkey's religious affairs agency, Mehmet Gormez, had also wanted to give readings from the Koran but were not allowed to, it added.
The Turkish President's bodyguards and US Secret Service agents also clashed briefly while he was in Louisville.
During his trip, Erdogan was full of praise for Ali, hailing him as a fighter not just in the ring but for Muslims in general.
"While running from success to success in the rings, he also became the voice of the oppressed and victims along with Muslims from every corner of the world," he said.
Erdogan's visit to the US also caused consternation in Turkey, with Erdogan leaving the day after a bomb attack in Istanbul claimed by Kurdish militants that killed 11 people.
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