UNESCO had said on Friday it was postponing the exhibit after receiving a letter from the 22-member Arab Group which expressed concern it "could impact negatively on the peace process and current negotiations under way in the Middle East."
But Prime Minister Benjamin Netanyahu denied the exhibit would damage talks with the Palestinians, which began in July but have shown little sign of progress.
"It would not harm the negotiations. Negotiations are based on facts, on the truth, which is never harmful," Netanyahu told ministers at the beginning of the weekly cabinet meeting.
On Thursday, Israeli ambassadors in London, Rome, Paris and Madrid were called in for explanations in a move Netanyahu slammed as "hypocritical."
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"The one-sided approach toward Israel does not advance peace -- it pushes peace further away," he said.
The exhibition, "The 3,500 Year Relationship of the Jewish People to the Holy Land," was due to open Tuesday at UNESCO's headquarters in Paris.
Israel's relations with UNESCO have been at a major low since October 2011 when the Palestinians were admitted to the organisation as a full member.