Both Mr Watson and Mr Hope are supporters of Momentum - the hard-left group set up to back Labour leader Jeremy Corbyn.
During last weekend's event at a pub, Mr Hope addressed the crowd of around 60 Labour activists and "toasted" Mr Watson saying: "This is for someone who can't be with us tonight, but has worked so hard for the party."
His words were cheered loudly by the numerous Momentum supporters who turned up for the event.
One onlooker told the JC: "It was shocking to hear the chair of the local Labour Party do a sort of 'absent friends' speech to a person who has been suspended.
"This sort of thing has been going on in Stella Creasy's constituency for some time, with hard-left activists trying to unsettle her.
"There were several Jewish supporters of the party in the room when the speech was made. They all looked pretty shocked that the chair of the CLP would thank this man.
"There was no reason given for his absence from the event, but it is a pretty important reason."
When invited to speak herself, Ms Creasy was heard to state "antisemitism has no place in the Labour movement".
Mr Watson was revealed earlier this year to have shared other articles on Facebook alleging that Daesh had used weapons made in Israel, comparing Mossad with the Nazis, and accusing Israel of genocide against the Palestinians.
Following his suspension, Mr Watson was pictured alongside Mr Corbyn at a leadership campaign event in August.
Mr Watson is also known to have shared a platform with James Schneider, Momentum's national organiser, some weeks after he was suspended.
When challenged over his tribute to Mr Watson, Mr Hope told the JC: "I'm not going going to comment on that.
"Our opposition to antisemitism is very clear. I'm not going to comment further.
"The matter you are talking about is being investigated by the national party and I can't comment."
In a statement, Ms Creasy said: "I cannot comment on an ongoing investigation, but let me be clear that antisemitism has no place in the Labour movement.
"I'm sad that we have come to a place in our movement's history where this has become controversial or necessary to say.
"I can also confirm I spoke at the event to make this clear and the importance to progressive political movements of speaking out to challenge such hatred and division."
