Refering to the acts of terror like Sunday's Orlando massacre which he said were perpetrated to divide along lines of race, religion, sect and sexuality, Malcolm said "that kind of hatred and division must not prevail".
Malcolm said he was not aware that he was dining with the preacher Sheikh Shandy Alsuleiman and asked him to recant comments that gay people were responsible for spreading HIV and other disease.
Alsuleiman was among several Muslim leaders who attended the first ever iftar dinner hosted by the Prime Minister at Kirribilli House.
Turnbull yesterday became the first Australian Prime Minister to host an iftar - the meal at which Muslims end their fast at sunset during the holy month of Ramadan.
The incident occurred two days after Australia cancelled the visa of a British cleric, Farrokh Sekaleshfar, over his anti-gay comments including advocating capital punishment for homosexual acts in public.