What do the US, Canada, ­Australia, New Zealand, the Netherlands, Germany, Poland, Italy and Israel have in common? They are all either European or European-settler states. And they all decided to boycott this week's UN ­conference against racism in Geneva – even before Monday's incendiary speech by the Iranian president Mahmoud Ahmadinejad which triggered a further white-flight walkout by representatives of another 23 European states.

In international forums, it's almost unprecedented to have such an ­undiluted racial divide of whites-versus-the-rest. And for that to happen in a global meeting called to combat racial hatred doesn't exactly augur well for future international understanding at a time when the worst economic crisis since the war is ramping up racism and xenophobia across the world.

Didn't Canada or Australia have anything to say about the grim condition of their indigenous people, you might wonder, or Italy and the Czech Republic about violent attacks on Roma people? Didn't any of the boycotters have a contribution to make about the rampant Islamophobia, resurgence of anti-semitism and scapegoating of migrants in their countries over the last decade?

The dispute was mainly about Israel and western fears that the conference would be used, like its torrid predecessor in Durban at the height of the Palestinian intifada in 2001, to denounce the Jewish state and attack the west over colonialism and the slave trade. In fact, although it was the only conflict mentioned in the final Durban declaration, the reference was so mild (recognising the Palestinian right to self-determination alongside Israel's right to security) that the then Israeli foreign minister, ­Shimon Peres, called it "an accomplishment of the first order for Israel".

In this week's Geneva statement, Israel isn't mentioned at all. But the US bizarrely still used its reaffirmation of the anodyne Durban declaration to justify a boycott, to the anger of African American politicians such as Jesse Jackson and Barbara Lee, who chairs the US Congressional Black Caucus. In fact, like the other boycotting governments, the US administration had been intensely lobbied by rightwing pro-Israel groups, who had insisted long in advance that the conference would be a "hatefest".

Ahmadinejad's grandstanding played straight into that agenda. The most poisonous phrases in the printed version of his speech circulated by embassy officials referred to the Nazi genocide as "ambiguous and dubious" and claimed Zionist "penetration" of western society was so deep that "nothing can be done against their will". That a head of state of a country of nearly 70 million people is still toying with Holocaust denial and European antisemitic tropes straight out of the Tsarist antisemitic forgery, The Protocols of the Elders of Zion, is not only morally repugnant and factually absurd. It's also damaging to the Palestinian cause by association, weakens the international support Iran needs to avert the threat of attack over its nuclear programme, and bolsters Israel's claims that it faces an existential threat.

But, perhaps as a result of an appeal by the UN secretary general Ban Ki-moon, Ahmadinejad dropped those provocations at the last minute. What in fact triggered the walkout of European Union ambassadors was his reference to Israel as a "totally racist regime", established by the western powers who had made an "entire nation homeless under the pretext of Jewish suffering" and "in compensation for the dire consequences of racism in Europe".

The rhetoric was certainly crude and inflammatory. Britain's foreign secretary David Miliband called it "hate-filled". But the truth is that throughout the Arab, Muslim and wider developing worlds, the idea that Israel is a racist state is largely uncontroversial. The day after Ahmadinejad's appearance, the Palestinian Authority foreign minister, Riyad al-Maliki, echoed the charge in the conference hall, describing Israeli occupation as "the ugliest face of racism". It's really not good enough for Britain's ambassador to the UN in Geneva, Peter Gooderham – who led the Ahmadinejad walkout – to say of the charge of Israel's racism, "we all know it when we see it and it's not that".

This is a state, after all, created by European colonists, built on the ethnic cleansing of the indigenous population, whose founding legal principles guarantee the right of citizenship to any Jewish migrant from anywhere in the world, while denying that same right to Palestinians born there along with their descendants. Of course, Israel is much else besides, and the Jewish cultural and historical link with Palestine is a ­profound one.

But even those Palestinians who are Israeli citizens face what the then Israeli prime minister Ehud Olmert last year called "deliberate and ­insufferable" discrimination by a state which defines itself by ethnicity. For Palestinians in the occupied territories, ruled by Israel for most of the state's existence, where ­ethnic segregation and extreme ­inequality is ruthlessly enforced, the situation is far worse – even without the relentless military assaults and killings. And Israel now has a far-right ­government whose foreign minister, Avigdor Lieberman, has said 90% of Israel's Arab citizens have "no place" in the country, should be forcibly "transferred", and only be allowed citizenship in exchange for an oath of loyalty to Israel as a Zionist Jewish state.

But if Lieberman had turned up to speak at the Geneva anti-racism conference, who believes that western delegates and ambassadors would have staged a walkout? Of course, there's a perfectly ­reasonable argument to be had about the nature of Israel's racism and whether it should be compared to apartheid, for example. But for western governments to hold up their hands in horror when Israel is described as a racist state has no global credibility whatever.

Israel's supporters often complain that, whatever its faults, it is singled out for attack while the crimes of other states and conflicts are ignored. To the extent that that's true in forums such as the UN, it's partly because Israel is seen as the unfinished business of European colonialism, along with the Middle East conflict's other special mix of multiple toxins. The Geneva boycotters, fresh from standing behind Israel's carnage in Gaza, are in denial about their own racism – and their continuing role in the tragedy of the Middle East.

• This article was amended on Friday 24 April 2009. We originally referred to Shimon Peres as Israel's prime minister in 2001, he was actually the foreign minister at that time. This has been corrected.

