FIFA has recommended former German FA secretary general Helmut Sandrock be fined 50,000 Swiss francs following an investigation into the awarding of the 2006 World Cup to Germany (AFP Photo/Michael Buholzer)

Kuala Lumpur (AFP) - Malaysia has relinquished the rights to host the 2017 FIFA Congress, a sports official said Monday after the predominantly Muslim country refused to issue visas to Israeli delegates.

"We were advised by the government to withdraw from hosting the congress due to security issues," Affandi Hamzah, deputy president of the Football Association of Malaysia, told AFP.

Affandi declined to elaborate on the "security issues" but said the move was tied to comments by Deputy Prime Minister Zahid Hamidi over the weekend.

Zahid had said Malaysia was unable to provide visas to Israeli officials because it did not have diplomatic ties and could rile up local sensitivities.

"Some of the conditions of hosting the event include placing the (Israeli) flag on the table during the congress," he was quoted as saying by the New Straits Times online.

"After comparing the benefits and the risks, it is better for Malaysia to avoid playing host."

Affandi said the FAM had in July written to FIFA informing them it was withdrawing from hosting the event on "government advice" and the world football body accepted Malaysia's decision.

Muslim-majority Malaysia has no diplomatic ties with Israel but has stood up for the rights of Palestinians.

Malaysia's move also follows speculation of snap elections in the first half of next year.

The presence of Israeli officials could stir anger among Muslim voters against the ruling Barisan Nasional coalition led by Prime Minister Najib Razak which traditionally depends on them to stay in power.

The country has been rocked by a scandal over allegations that billions of dollars were stolen from a state wealth fund founded and overseen by Najib.

Former Asian Football Confederation general secretary Peter Velappan described Malaysia's failure to host the event as "painful".

"Suddenly Malaysia puts restrictions. Violating the FIFA conditions and losing the hosting rights at this stage is very painful," he said.

Israel missed the 2015 Youth Sailing World Championships in Malaysia, reportedly after a similar row over visas and flags.

In 1997, when Israel played the International Cricket Council Trophy competition in Malaysia, hundreds of people took part in angry demonstrations.

Protestors also took to the streets and burned Singapore and Israeli flags when the then Israeli president Chaim Herzog made an official visit to the neighbouring city-state in 1986.