Referring to the slaughter of five members of the Fogel family in Itamar in March, he said: "How have we come to a time when blowing up babies and cutting their throats are an acceptable means to a political goal."
But he added: "We are facing a new holocaust, and people of all faiths must demand that the truth be heard.
"The Palestinian radicals have only one prayer on their lips: To remove every Jew from Israel."
Abraham Foxman, the national director of the ADL, said the remark was "off-the-mark and inappropriate".
He added: "If anything, it's the Iranians who are threatening a Holocaust, not the Palestinians.
"I wish he had not used that characterisation."