Mr Lula is the first Brazilian president to visit the region
Israel's foreign minister is reported to have boycotted the visit to Israel by the Brazilian President, Luiz Inacio Lula da Silva.
Israeli and Brazilian media said Avigdor Lieberman declined to attend meetings with the visiting head of state and his address to parliament.
Mr Lieberman was reportedly upset that Mr Lula refused to visit the grave of the founder of the Zionist movement.
Mr Lula also opposes sanctions against Iran over its nuclear program.
'Mission of peace'
Mr Lula described his visit to Israel as "a mission of peace" that he hoped would help his country emerge as a bigger player in foreign affairs.
He informed Israeli President Shimon Peres that Israel had been accepted as the first non-South American partner in the free trade group, Mercosur.
Brazil is Israel's largest trading partner in Latin America, and trade between Brazil and Iran has also grown by 40% during Mr Lula's presidency.
The Brazilian leader is visiting Israel, the Palestinian territories and Jordan ahead of a more controversial visit to Iran in May.
In November last year, Mahmoud Ahmadinejad became the first Iranian president to visit Brazil.
On that occasion, President Lula criticised attempts to isolate Iran over its nuclear ambitions but he also urged President Ahmadinejad to engage with the West.