Jews may be waving a Palestinian flag at a demonstration on Sunday — while the Israeli flag will be displayed by a group of fascists.

This surreal prospect follows the adoption of the Israeli flag by some British extreme rightwingers.

Members of the English Defence League clashed with anti-racists in Birmingham on Saturday. Prominent in some of the photographs were demonstrators waving an Israeli flag. At least one Muslim website has claimed a “connection between the EDL and Zionists”.

Now the EDL has called on its supporters to mount a counter-demo to the Al Quds (Jerusalem) march in central London on Sunday afternoon.

It wants people to rally in Trafalgar Square to counter the annual Iranian-sponsored march, organised by pro-Hizbollah groups. Among the billed guest speakers is Ahron Cohen, leader of the anti-Israel Neturei Karta sect, whose members routinely wave Palestinian flags at such demonstrations.

An Israeli Embassy spokesperson said: “It is appalling to see the flag of Israel abused by thugs who stir up violence and tension between communities. Israel’s flag is a symbol of the 2000 year struggle of the Jewish people against racism and should not be manipulated by racists or extremists of any kind.”

Mark Gardner, communications director of the Community Security Trust, said: “It’s certainly a very negative development for the Israeli flag to be used as some kind of metaphor for anti-Muslim behaviour.”

Mr Gardner said the Israeli flag had been used in the past by fans of Glasgow Rangers to taunt supporters of rival Glasgow club Celtic.

“The BNP has made opportunistic comments about Israel in wanting to stress their hatred of Muslims — but those comments should not be regarded as anything other than that.”

Gerry Gable, of the anti-fascist magazine Searchlight said: “This has nothing to do with Zionism. The EDL want to wind up Muslims so they will throw anything they can at them, including the Israeli flag, though I think this is the first time it has been used quite like this.”

Board of Deputies chief executive Jon Benjamin said: “This is an attempt to draw the Jewish community into a rabble-rousing conflict between two opposing extremist groups. There is no common cause with right-wing racists — and those who allege that there is show how mired they are in their hatred of Jews.”

Last week police in Birmingham made 90 arrests as running battles broke out between the EDL and anti-racist groups. Shoppers ran for cover as bricks and bottles were thrown.