Australian prime minister Malcolm Turnbull voiced regret on Friday after inviting a senior Islamic leader who has condemned homosexuality to a fast-breaking Ramadan dinner.

Sheikh Shady Alsuleiman was present on Thursday evening at an exclusive function at the Australian leader's official Sydney residence Kirribilli House, alongside other leading Muslim figures.

In a sermon uploaded to YouTube in 2013 the sheikh, president of the Australian National Imams Council, said gay people were responsible for spreading diseases and attracted "evil outcomes to our society".

Mr Turnbull, MP for the Sydney seat that hosts the annual Gay and Lesbian Mardi Gras parade, said he would not have invited him if he had known his views, emphasising the need for acceptance of diversity of sexuality and religion.