An exhibit at the Yad Vashem memorial is seen as critical of Pius XII
A photo montage which superimposed a Nazi swastika over Pope Benedict has appeared on a website run by supporters of Israel's leading political party.
The image was later removed from the Yalla Kadima website, apparently on the orders of party leader Tzipi Livni.
The incident comes amid a row with the Vatican over Israeli claims that the late Pope Pius XII could have done more to prevent the Holocaust.
Ms Livni is currently trying to form a government and become prime minister.
"Tzipi Livni strongly condemns this and we are working to remove this shameful picture. We strongly oppose this. It doesn't represent Kadima," spokesman Amir Goldstein said shortly before the photo was changed.
Speaking anonymously, one of the website's editors told the BBC the site is a platform for Kadima activists to voice their opinions in a manner they cannot do on the official website.
The letter and graphics were sent in by a group of pensioners, he said.
"Some of these people are first generation or second generation Holocaust survivors, and this is their legitimate protest," he said.
He said Ms Livni rang personally and asked for the picture to be taken down, saying it could cause diplomatic strife.
There are objections among many in Israel to the long process, begun in 1967, to make Pope Pius, who was pontiff from 1939 to 1958, a saint.
The row blew up afresh last week after the Vatican official in charge of the process said the current pontiff, Benedict, should not accept Israel's invitation to visit until the wording on an exhibit in the Yad Vashem Holocaust memorial in Jerusalem is changed.
Israel has issued an invitation to Pope Benedict to visit
The display says that, despite warnings from clergy throughout Europe about the deportation of Jews to death camps, Pope Pius XII did nothing to condemn it or to intervene.
The Vatican has repeatedly objected to the content of the display, saying it is an "incorrect interpretation of the late Pope's role".
The Holy See maintains that Pius actively helped some Jews by sheltering them in churches and monasteries.
But the Vatican has also said the exhibit should not be a "determining factor" in a papal visit.
Pope Benedict spoke last month in favour of the beatification process, a stage on the way to sainthood, for the former Pope.
And Israel has long regarded the Vatican, which did not recognise the country until 1993, as pro-Palestinian.
For its part, the Vatican wants to resolve a stand-off over the taxation of Church property in Israel, as well as problems with visas.
Our correspondent says there is plenty of work ahead, but this meeting is a significant step towards a warmer relationship.