Last week Mohamad said Israeli swimmers would not be allowed into Malaysia -- a Muslim majority country -- for a tournament later this year that serves as a qualifying event for the Tokyo 2020 Paralympics.
Foreign Minister Saifuddin Abdullah on Wednesday insisted the country would "not host events" that have Israeli participation.
"It is about fighting on behalf of the oppressed," he added.
Israeli foreign ministry spokesman Emmanuel Nahshon hit back at the "shameful" decision to bar athletes from the country and said the move "totally opposes the Olympic spirit".
"Israel condemns the decision inspired no doubt by Malaysia's PM Mahathir's rabid anti-Semitism," he said.
"We call upon the International Paralympic Committee to change this wrong decision or change the venue of the event."
Kuala Lumpur has rejected pleas from the world sporting body to find a solution to the row.
Malaysia is one of several predominantly Muslim states that have no formal diplomatic ties with Israel. Entry to the country on an Israeli passport is forbidden.
The Palestinian cause has widespread support in Malaysia, as thousands took to the streets in protest when US President Donald Trump recognised Jerusalem as Israel's capital in 2017.
Israel occupied Arab east Jerusalem in 1967 and later annexed it, declaring the entire city its "eternal and indivisible capital", but Palestinians claim the eastern part as the capital of their own future state.
Malaysia has stopped Israeli athletes from competing in a sports event before. Two Israeli windsurfers had to pull out of a competition on the island of Langkawi after they were refused visas in 2015.
Kuala Lumpur also refused to host a conference for world football's governing body FIFA in 2017 as an Israeli delegation was due to attend.
Mahathir, now 93 and in his second stint as premier, has in the past attracted criticism for his verbal attacks on Jews, including calling them "hook-nosed".
The previous government allowed a high-level Israeli delegation to attend a UN conference in Kuala Lumpur in 2018, sparking public anger.