The net is being used by racist and extremist groups trying to recruit new members and spread their message.
Racists are using a Martin Luther King website as a front
A report detailing 200 of the websites monitored by the Wiesenthal Center shows how sites have become key fund-raising and marketing outlets.
Some sites feature games that let visitors "shoot" illegal immigrants, Jews and black people, said the report.
In 2004 websites seeking to recruit youngsters to join holy wars and become suicide bombers have surged, it said.
Web of hatred
Jewish human rights group The Simon Wiesenthal Center monitors 4,000 websites used by racist, "terrorist" and other extremist organisations. It has been tracking such hate sites for about nine years.
The latest report shows how important the net has become to extreme groups, including racists, "terrorist" groups and homophobic organisations, and details the way that the groups use websites to spread their messages.
Sites included in the report, which takes the form of an interactive CD, include explicity racist sites as well as those that include extremist views.
This latter group includes sites denying the Holocaust as well as promoting claims that Israel and the US were behind the 9/11 attacks.
The Wiesenthal Center said one of the most "troubling" sites was about Martin Luther King but was owned by a racist organisation and was being used to denigrate his memory and achievements.
The report said that supporters of militant Islam organisations, such as al-Qaeda, are also using websites to recruit new members and to venerate members of the organisation carrying out attacks.
The Wiesenthal Center said it did not intend to shut down the websites or stifle free speech.
"This is for public awareness," said Mark Weitzman, director of the center's Task Force Against Hate.
Earlier versions of the Wiesenthal's report on the websites have been used in schools, colleges and law enforcement agencies around the world to educate people about the extent and range of extremist sites on the web.