An Islamic preacher who views Hamas terrorists as "freedom fighters" has been invited to address University College London students, less than a fortnight after its provost Professor Malcolm Grant claimed there was no problem with extremism on campus.

Sheikh Zahir Mahmood, described by interfaith organisation StandforPeace as a "hate preacher" is guest of honour at tonight's UCL Medical School Islamic Society annual dinner.

The British sheikh, a supporter of George Galloway, was one of the participants of a Viva Palestina convoy to Gaza. He has criticised Muslims for placing more importance on their nationality than their religion and stated that Palestinians have lived in an "open concentration camp for 60 years".

In a speech in Birmingham in March 2009, he claimed it was "a perverted narrative" to suggest that Hamas members were terrorists and said they were merely "defending their country".

He added: "What the Palestinians are going through is far greater than what the blacks went through in South Africa but because Israel is an ally we will turn a blind eye to these atrocities." He also called for people to be "mobilised" to support the Palestinians.

A spokesman for Prof Grant said he stood by his belief that the problem of extremism at UCL had been "over-hyped", despite students contradicting his claims that it was a "non-issue". He said UCL was legally obliged to uphold freedom of speech and as such, would not bar "speakers with controversial, distasteful or even repugnant views".

He suggested that concerned students should "attend the event, question those they disagree with and contribute to the evolution of the discussion".

Hasan Afzal, the director of StandforPeace, said it was "extraordinary" that the provost continued to be "oblivious to the extremism that germinates right under his nose".

The UCL JSoc president, Adam Taylor, agreed. "Quite how he can boast of the non-existence of hate-speech when it is so demonstrably present is absurd," he said.

"This is an issue that needs dealing with urgently."

Dan Sheldon, the Union of Jewish Students campaigns director, said it was distressing to see that "yet another extremist" had been invited to UCL.

"Freedom of speech is crucial within our universities, but not at the expense of student welfare," he said. "It's time for Prof Grant to stop ignoring the harmful influence of extremists such as Mahmood."

Jonathan Arkush, senior vice-president of the Board of Deputies said that the invitation should show Prof Grant that "campus extremism is a serious issue".

He said: "The extremist ideology and influence of such individuals is alarming and unwelcome, and for the UCL campus to be providing a platform for Zahir Mahmood is surely an embarrassment for the university.

"The Board calls on the Government and academic authorities to continue to work in conjunction with NUS and UJS to understand and address the concerns of students confronted with hate speech on our university campuses and to take effective action to prevent it."