He said the sense of sacrilege and the feeling of horror remained stuck in his mind.
"Sport should transcend politics," said the mayor. "It should bring out the best in the human race and draw people together."
Other guests included former Olympian Ben Helfgott, Efraim Zinger, who is leading Israel's delegation to the Games, and Communities Secretary Eric Pickles.
"I hope we will be able to concentrate on the success of Israel's athletes and not of stories like this," said Mr Zinger as he looked towards this summer's competition.
Pupils from the Simon Marks Primary School sang songs including Jerusalem of Gold and both the national anthem of the UK and of Israel. Kaddish and the memorial prayer were recited.
A letter was read out from Lord Coe apologising for his absence but with no mention of his stance on a minute's silence for the victims.
Cllr Kelly said the IOC's position on the issue was unacceptable. "It goes against the spirit of the games," she said. "The IOC is making a mockery of the ethos of the games."
