The Liberal Democrats have insisted that the party remains a "friend" of Israel, despite uproar at comments made by its shadow deputy leader of the Lords, Lord Wallace, to the Board of Deputies on Sunday.

A number of deputies walked out of the meeting in Sheffield after Lord Wallace's criticism of Israel and defence of Baroness Tonge's "overemotional" support of the Palestinians.

Agnes Grunwald-Spier, a former chairman of the Board's regional council, said she had walked out because she had found the comments "extremely offensive", adding: "I don't think he has done his party any favours."

Danny Handler, who leads the Board's Israel group, called the peer's address "disgraceful" and a "shocking revelation of Liberal Democrat attitudes to Israel".

But a party spokesman said that Lord Wallace, who speaks on international affairs, had made it clear that the Liberal Democrats were "a critical friend" of Israel.

"It was not an anti-Israel speech", the spokesman said. "It was because we are friends of Israel that we will be candid and critical."

Lord Wallace told the Board that Israeli policy towards the Palestinians was "mistaken" and that, as a democracy, Israel should be held to higher standards than Saudi Arabia.

He also said that Baroness Tonge - sacked in February as a party health spokesman - had been "trapped" by a "deliberately provocative question" from the JC.

Baroness Tonge had suggested that Israel should hold an inquiry to refute allegations that its medical teams had harvested organs from Haiti earthquake teams. The claims were made by the Palestine Telegraph, an online journal of which she is a patron.

"The reason why we resist expelling her from the party is that we do sadly find the current Likud Party very intolerant of all criticism," Lord Wallace declared.

Extended extracts of his remarks can be seen at thejc.com

Ed Fordham, the party's candidate for the marginal seat of Hampstead and Kilburn next month and a member of Liberal Democrat Friends of Israel, said Lord Wallace's comments did not appear "informed, fully accurate [or] reflective of where those of us have a deep interest in this would put ourselves…. This doesn't feel like the conversation the Board deserved."

Matthew Harris, the vice-chairman of LDFI, who is standing for the party in Hendon, said that although Lord Wallace had been "wrong" about Baroness Tonge, "I don't think that most pro-Israel people have a problem with most of what he said." He said that if people were "worried" by the influence of critics of Israel in the Liberal Democrats, they should balance that by electing supporters of Israel such as himself.

The Board of Deputies has made no official comment. But its treasurer, Laurence Brass, who is a former Liberal parliamentary candidate, said: "I don't think it is helpful for the Board to only hear from politicians who want to tickle our tummies and tell us how wonderful Israel is, when we all know that the Israeli government's peace credentials are being severely questioned in both London and Washington."

He added that he "didn't like a lot of what Lord Wallace said" and would have wanted a stronger condemnation of the "detestable Jenny Tonge".