The dinner was held by Prime Minister Recep Tayyip Erdogan his Ankara residence. Turkey's Foreign Minister Ahmet Davutoglu and European Union negotiator Egemen Bagis also attended.
Last year, Israeli Ambassador Gabby Levy attended the dinner but was snubbed this year, Turkish media reports said.
The incident is one of many marking a serious deterioration in relations between Israel and Turkey, which was touched off by Israel's raid 11 weeks ago on the Turkish boat Mavi Mamara, which was carrying supplies to Gaza. Nine Turkish activists were killed.
Since the May 31 raid Ankara has recalled its ambassador, accused Israel of committing war crimes and demanded a public apology and compensation for the families of the victims.
The strained relations have also led to the canceling of joint military exercises, a sharp decline in the number of tourists who visit Turkey and to a number of violent anti-Israel demonstrations in Ankara and Istanbul.