Jeremy Corbyn made "offensive" comments at the launch of a Labour party inquiry into anti-Semitism, t he Chief Rabbi has said.
Rather than rebuilding trust among the Jewish community, the Labour leader has caused "even greater concern", Ephraim Mirvis warned.
Labour MP Ruth Smeeth claimed the party "cannot be a safe space" for British Jews after Mr Corbyn failed to intervene when she was verbally abused by one of his grassroots at the event.
The Opposition leader was also forced to deny comparing Israel and Islamic State after telling the event Jews were "no more responsible for the actions of Israel" than Muslims were for the "various self-styled Islamic states or organisations".
Britain's most prominent Jewish leader said Mr Corbyn's comments likening the Israeli state to jihadi terrorists were harmful, "however they were intended".
There "is much" in the report carried out by former Liberty director Shami Chakrabarti into anti-Semitism in the party that "can herald an important step forward", particularly its "acknowledgement that some within the Labour Party have peddled the prejudice of anti-Semitism, using language, innuendo and accusations that are deeply offensive and which should be universally condemned"," he said.
The Chief Rabbi added: " The comments by the leader of the Labour Party at the launch, however they were intended, are themselves offensive, and rather than rebuilding trust among the Jewish community, are likely to cause even greater concern.
"Full and unhesitating implementation of the report's findings must now follow. I call upon the Labour Party to guarantee that there will be zero tolerance of anti-Semitism."
The review recommended that Labour members should not use terms such as "Paki" or "Zio" and should steer clear of invoking Hitler, particularly in debates about Israel and Palestine.
"The Labour Party is not overrun by anti-Semitism, Islamophobia, or other forms of racism," it added.
Board of Deputies president Jonathan Arkush said the report was "weak on the demonisation of Israel" and "omitted any mention of party figures who have displayed friendship towards terrorists".
Jonathan Sacerdoti, director of communications at the Campaign Against Anti-Semitism, said the report was a whitewash and attacked Mr Corbyn.
" It did not examine the disgraceful cases of anti-Semitism in the party, or their even more disgraceful mishandling by the party leadership, including Jeremy Corbyn, who presides over a regime of the lightest slaps on wrists for even the most offensive and deliberate anti-Semites.
"Inexcusably, the inquiry proposes making it harder to suspend anti-Semites and keeping suspensions secret so as not to affect elections. Additionally the inquiry dismisses any claims of anti-Semitism arising from sharing a stage with anti-Semites, and suggests that any anti-Semitic incident coming to light after more than two years should not be considered - a limitation period so short it has no parallel in any other disciplinary regime that we are aware of.
"Apart from imploring Labour activists to stop calling Jews 'Zios' or accusing them of supporting Nazi policies, this inquiry is a vague, meaningless whitewash that will do nothing to rid Labour of anti-Semitism or address the total absence of leadership it has shown on this issue.
"For Jeremy Corbyn to compare Israel to Isis during his event dedicated to anti-Semitism only goes to show just how little grasp he has of this pressing problem for his party."
The review had been launched following the suspension of high-profile figures like MP Naz Shah and former London mayor Ken Livingstone.
Ms Smeeth said the Labour leader had shown a "catastrophic failure of leadership" and must immediately resign to make way for "someone with the backbone to confront racism and anti-Semitism".
Marc Wadsworth, who runs Momentum Black Connexions, accused the Jewish MP of "working hand in hand" with the Daily Telegraph during a tirade in front of the leader at the launch event in central London.
A clearly upset Ms Smeeth stormed out of the event after Mr Corbyn failed to intervene.
She said: "I call on Jeremy Corbyn to resign immediately and make way for someone with the backbone to confront racism and anti-Semitism in our party and in the country."
The Labour leader has insisted he condemns "any abuse of MPs of any kind" but Ms Smeeth said that under his leadership, the party "cannot be a safe space for British Jews".
"I was verbally attacked by a Momentum activist and Jeremy Corbyn supporter who used traditional anti-Semitic slurs to attack me for being part of a 'media conspiracy'," Ms Smeeth said.
"It is beyond belief that someone could come to the launch of a report on anti-Semitism in the Labour Party and espouse such vile conspiracy theories about Jewish people, which were ironically highlighted as such in Ms Chakrabarti's report, while the leader of my own party stood by and did absolutely nothing.
"People like this have no place in our party or our movement and must be opposed.
"Until today I had made no public comment about Jeremy's ability to lead our party, but the fact that he failed to intervene is final proof for me that he is unfit to lead, and that a Labour Party under his stewardship cannot be a safe space for British Jews.
"I have written to the general secretary of the Labour Party and the chair of the Parliamentary Labour Party to formally complain about this morning's events.
"No one from the leader's office has contacted me since the event, which is itself a catastrophic failure of leadership."
Mr Corbyn hailed the findings of the report, before telling supporters and journalists: "Our Jewish friends are no more responsible for the actions of Israel or the Netanyahu government than our Muslim friends are for those of various self-styled Islamic states or organisations".
Pressed on whether was likening the Israeli state with the jihadi group, he said "of course not".
"The point in the report is you shouldn't say to somebody just because they are Jewish you must have an opinion on Israel any more than you would say to anyone who is a Muslim you must have an opinion on any vile actions that have been taken by misquoting the good name of Islam in what they do," he added.
Karen Pollock, chief executive of the Holocaust Educational Trust, said: "These findings acknowledge problems of anti-Semitism, conspiracy theories, abuse of the Holocaust to cause maximal offence, and attacking Jewish people's right to self-determination taking place in the Labour Party.
"Indeed, the problems the party faces have never been clearer given the shocking actions of one man at the launch of the report today - openly implying the collusion between a Jewish MP and the media.
"If the red lines are clear - and understood - the Labour Party will now need to demonstrate firm and appropriate action in current and future investigations regardless of how prominent these cases may be."