A senior Israeli diplomat on Saturday was removed from the African Union's annual summit in Ethiopia, as a dispute over Israel's accreditation to the bloc escalated.

Images posted online showed AU security personnel confronting the diplomat during the opening ceremony of the summit, before she left the auditorium.

"Israel looks harshly upon the incident in which the deputy director for Africa, Ambassador Sharon Bar-Li, was removed from the African Union hall despite her status as an accredited observer with entrance badges," the foreign ministry said.

Ebba Kalondo, the spokesperson for the African Union's commission chairman, said the diplomat had been removed because she was not the duly accredited Israeli ambassador to Ethiopia, the official who was expected.

But Israel blamed the incident on South Africa and Algeria, two key nations in the 55-country bloc, saying they were holding the AU hostage and were driven by "hate".

Israel's Foreign Ministry said the charge d'affaires at South Africa's embassy would be summoned for a reprimand.

"The attempt to cancel Israel's observer status has no basis in the organization's laws," the ministry said.

South Africa rejected the claim, saying Israel's application for observer status at the AU has not been decided upon by the bloc.

"Until the AU takes a decision on whether to grant Israel observer status, you cannot have the country sitting and observing," Clayson Monyela, head of public diplomacy in South Africa's department of international relations, told Reuters.

"So, it's not about South Africa or Algeria, it's an issue of principle."

South Africa's ruling party has historically been a strong supporter of the Palestinian cause.

The Algerian delegation at the summit was not immediately available for a comment.