BUDAPEST—A call in Hungary’s parliament for Jews to be registered as threats to national security has sparked widespread condemnation of Nazi-style policies and a protest outside the legislature.

Marton Gyongyosi, the lawmaker from the far-right Jobbik party, dismissed demands Tuesday that he resign, saying his remarks during a debate on Monday had been misunderstood. Gyongyosi, 35, said he had been referring only to Hungarians with Israeli passports.

Hundreds of demonstrators gathered outside parliament, many wearing the kind of yellow stars forced on Europe’s Jews in the 1940s, some chanting “Nazis go home” at Jobbik members.

“I am a Holocaust survivor,” local Jewish leader Gusztav Zoltai said by telephone. “For people like me, this generates raw fear.”

Though he dismissed Gyongyosi’s comments as opportunistic grandstanding, Zoltai said: “This is the shame of Europe, the shame of the world.”

The centre-right government of Prime Minister Viktor Orban issued a statement on Tuesday condemning the remarks by Gyongyosi, whose party surged into parliament two years ago on a campaign drawing on suspicion of Roma and Jewish minorities and attracting support from voters frustrated by economic crisis.

But in Jerusalem the Simon Wiesenthal Center criticized the government for a tardy response, more than 16 hours after the event, and called the failure to penalize Gyongyosi as “a sad commentary on the current rise of anti-Semitism in Hungary.”

About 500,000 to 600,000 Hungarian Jews were killed in the Holocaust, according to a memorial centre in Budapest. Some 100,000 Jews now live in Hungary.

Gyongyosi’s intervention in parliament on Monday afternoon came after discussion of last week’s fighting in the Gaza Strip.

Gyongyosi, one of 44 Jobbik members in the 386-seat parliament, said: “Such a conflict makes it timely to tally up people of Jewish ancestry who live here, especially in the Hungarian parliament and the Hungarian government, who, indeed, pose a national security risk to Hungary.”

Gyongyosi later indicated he was questioning the loyalty of Hungarians who hold dual Israeli citizenship.

In a posting on Jobbik’s website, he said: “I apologize to my Jewish compatriots for my declarations that could be misunderstood.”

Parliamentary speaker Laszlo Kover, who is from Orban’s Fidesz party, issued a statement calling for tighter rules to allow for such behaviour to be punished.