A group of eight Chinese tourists in Israel has been handed a 16,500-shekel (£3,280) bill after visiting a restaurant in the hills outside Jerusalem where one might typically expect to spend tens of pounds on a meal.

The cost of the meal at the Abu Ghosh restaurant in the Israeli Arab village of the same name, famous for its unpretentious eateries often specialising in hummus, came to light after an Israeli tour operators’ association posted a copy of the bill on social media and suggested that the tourists may have been “suckered”.

That put the association at loggerheads with the owners of the restaurant, who have contested the circumstances of how the bill was run up.

Reacting to the bill, which was first reported in the Israeli business magazine Globes, the tourism association said: “There may be a billion Chinese, but they may not all be suckers. These Chinese said they would not be back and would not recommend their friends to visit Israel.

“Naive customers are a very shaky basis for a business plan, and by behaving this way we are destroying with our own hands the budding potential of the Chinese market for Israel.”

The village of Abu Ghosh is popular with tourists and Israelis, who flock to its restaurants, particularly at the weekend, and Abu Ghosh restaurant is listed as one of the best places to eat hummus on websites such as TripAdvisor.

Defending the bill, Jawdat Ibrahim, one of the restaurant’s owners, said half of the restaurant – which has a capacity of 300 – had been rented by the tour party, who stayed for hours and ordered large amounts of grilled meat and alcohol. The tourism association denied this claim, saying it had spoken to the unnamed tour operator used by the group.

Speaking to the Guardian, Ibrahim blamed “envy” from competitors for fuelling the controversy. “Abu Ghosh restaurant is very famous. For 25 years it is has been known not just domestically but internationally.

“There are people who are envious of the fact that tourists make a pilgrimage to Abu Ghosh and not to some other establishments, including in Tel Aviv.”

Explaining the circumstances of the row, he added: “A while ago Chinese television made a programme about the restaurant and afterwards a guide from a Chinese tour company called me and asked me to prepare a private section for a group of Chinese.

“I was told they were very important people and they wanted to reserve a special section of the restaurant on Friday night, our busiest day. We provided them with their own bar and expensive drinks and a whole stuffed lamb, which cost me a lot.

“They seemed happy and gave us a large tip and then someone put the bill on Facebook! People don’t understand of course we have meals that cost $15 but this was special.”

Defending the decision to publish the bill, the tourism association told Israeli media: “The association decided to make this incident public in order to illustrate the importance of fair and polite treatment of tourists who come to Israel and are an important sector of the country’s economy. Incoming tourism represents about 15% of total exports of services by the state of Israel, and is an important generator of employment in the periphery.”