Outside the hall protesters chanted: “From the river to the sea, Palestine will be free.”
The Oxford Union has released a statement aplogising to Mr Ayalon and promising to launch an investigation and disciplinary proceedings against those responsible.
It said: "Whilst the vast majority of the audience behaved in an orderly and responsible fashion, some members continually interrupted the speech, and one individual in particular appears to have made a directly anti-Semitic remark. These individuals exceeded the principles of free speech that the Society upholds.
"They and their remarks are not representative of this Society, nor the vast majority of the audience. The Oxford Union will not tolerate this kind of behaviour by its Members.
"The Oxford Union believes in the rights of free speech and protecting our invited speakers' ability to express themselves in an orderly and disciplined environment.
"We further believe that our Members have the right to challenge and question the speakers in keeping with the Society's expectations of good conduct.
"Last night was unprecedented. A disorderly minority disrupted and prevented the speaker from holding the floor where he had been invited to speak."
Mr Ayalon took questions on the history of Israel and told the audience: “If I manage to convince you to go and learn the truth from the history books then this will have been a successful event.”
There were also protests outside as he spoke to members of the International Institute for Strategic Studies in central London.
He discussed Israel’s “challenges and opportunities”, including the prospects for peace with the Palestinians, regional co-operation and the growing threat from Iran.
He will meet MPs, Middle East Minister Ivan Lewis and members of the shadow cabinet before returning to Israel on Wednesday.
Watch the video of the protests here.
