An Arab Israeli preacher hailed by Jeremy Corbyn as an “honoured citizen” has been jailed for racist incitement in 2007.

Sheikh Raed Salah, the vehemently anti-Israel head of Northern Branch of Islamic Movement, began serving an eight-month sentence on Sunday, after first being acquitted in 2013. The decision was then reversed a year later.

“We have never allowed ourselves to knead [the dough for] the bread that breaks the fast in the holy month of Ramadan with children’s blood,” the former poet is alleged to have said in East Jerusalem nine years ago.

“Whoever wants a more thorough explanation, let him ask what used to happen to some children in Europe, whose blood was mixed in with the dough of the holy bread.”

After the speech, up to 1,000 Palestinians began rioting, throwing stones at security forces. His comments were investigated and a year later he was charged by Jerusalem Magistrates Court, which convicted him of incitement to violence but acquitted him of racist incitement. A year later, Jerusalem District Court overturned that decision, and found him guilty of racist incitement too.

Salah, 57, has twice been jailed before, once for funding Hamas before the group took power in Gaza, and once for assaulting a police officer, and was arrested in London in 2011, at the instigation of Home Secretary Theresa May and the Community Security Trust (CST).

His London arrest came a day before he was due to attend a high-profile House of Commons event with – among others – Jeremy Corbyn, who was then a backbench MP. A judicial review three months later determined that he had been “unlawfully detained”.

Salah, who is widely seen as anti-Semitic, is also alleged to have said that Jewish workers were “warned” not to go to work at the Twin Towers on 11 September, and to call for Jerusalem to be the capital of the global caliphate.

In 2012, Corbyn said Salah was “a very honoured citizen” whose “voice must be heard” but last year, during the Labour leadership campaign, Corbyn said that he met Salah unaware of any prior conviction for anti-Semitism, adding: “We had quite a long conversation and I made my views very clear. At no stage did he utter any anti-Semitic remarks to me.”