"If, God-forbid, we have problems again, we will deal with them quicker in the future."
Mr Watson attacked the anti-Israel boycott campaign, saying: "The BDS movement is morally wrong. It is failing."
He paid tribute to Shimon Peres, the late Israeli president, spoke of his friendship with Ian Austin, the Labour MP whose father escaped the Holocaust, and pledged his party's ongoing support for Israel.
Mr Watson appeared close to tears as he spoke of his trip to Israel this month, his friendships with Jews dating back to his time at Hull University, and his work with the Holocaust Educational Trust.
In a surprising opening to his address in Westminster, the MP led diners in a rendition of the song Am Yisrael Chai.
סגן יו״ר מפלגת הלייבור הבריטית, תום ווטסון, באירוע השנתי של חברי ישראל במפלגה המתרחש כעת, פרץ בשירת ׳עם ישראל חי׳, לתשואות הקהל pic.twitter.com/HXuIWkUIzG
The speech received a prolonged standing ovation from the 300 guests.
Joan Ryan, LFI chair, said that while the past year had "not been the easiest for friends of Israel in the party", the group was "stronger and more determined"./p>
She praised the Labour Students group for its efforts to tackle antisemitism./p>
Ms Ryan said Israeli and Palestinian youths should see each other as "potential team-mates" in their desire for peace./p>
Jennifer Gerber, director of LFI, said: “The excellent turnout at our lunch today, especially among parliamentarians, shows the strength of support for LFI. As Tom Watson made clear in his speech, the bonds between the Labour party and Israel are strong, long-standing and unbreakable. The record number of MPs wishing to participate in LFI delegations, backing our campaign ‘For Israel, For Palestine, For Peace’ and engaging in LFI activities in parliament demonstrates this fact.”/p>
Among the Labour MPs attending the lunch were Shadow Chancellor John McDonnell, Dan Jarvis, Angela Eagle, Yvette Cooper and Chuka Umunna./p>
Chief Rabbi Ephraim Mirvis and Israeli ambassador Mark Regev also attended.
