The row emerged on Monday but related to comments made on Saturday, hours after Friday's Paris attacks were claimed by the Islamic State group, also known as Isis.
Swedish Foreign Minister Margot Wallström told Swedish public broadcaster SVT that the decades-old Israeli-Palestinian conflict was a factor of radicalisation in the Middle East.
However Israel's foreign ministry condemned her remarks and later summoned the Swedish ambassador “for clarification” a statement said.
“The Swedish foreign minister's statements are appallingly impudent,” the text continued, quoting a foreign ministry spokesman.
“Whoever fatuously attempts to create a link between radical Islamist attacks and the current problems between Israel and the Palestinians is fooling himself, his people and international public opinion,” it added.
Wallström made her remarks after she was asked by a Swedish journalist if Sweden and other countries should worry about the rise of extremism.
She said: “Yes, it is clear that we have reasons to worry… to see that there are so many people who have become radicalised.”
“And once again we return to situations like that in the Middle East, especially (concerning) Palestinians who think: there is no future for us, we must accept a desperate situation or resort to violence.”
It was not the first time that Wallström has drawn a parallel between the Israeli-Palestinian conflict and the bolstering of radical movements in the Middle East.
Last year, after Sweden's recognition of the state of Palestine infuriated Israel, she said: “We want to contribute to creating more hope and belief in the future among young Palestinians and Israelis who might otherwise run the risk of radicalisation in the belief that there is no alternative to the current situation.”
Israel's foreign ministry said Wallström “has consistently demonstrated bias against Israel and exhibits genuine hostility when she indicates connection of any kind between the terrorist attacks in Paris and the complex situation between Israel and the Palestinians”.