Ruth Smeeth, who is Jewish, said Mr Corbyn had shown a “catastrophic failure of leadership” and must immediately resign to make way for “someone with the backbone to confront racism and anti-Semitism”.
Marc Wadsworth, who runs Momentum Black Connexions, accused the Jewish MP of “working hand in hand” with the Daily Telegraph during a tirade at the event in central London.
A clearly upset Ms Smeeth stormed out of the event, which had been staged to launch a report into anti-Semitism in the party.
She said: “I call on Jeremy Corbyn to resign immediately and make way for someone with the backbone to confront racism and anti-Semitism in our party and in the country.”
The Labour leader has insisted he condemns “any abuse of MPs of any kind” but Ms Smeeth said that under his leadership, the party “cannot be a safe space for British Jews”.
Mr Corbyn had ignored the criticism of Ms Smeeth during the event, instead focusing on the contents of the review carried out by Shami Chakrabarti.
“It is beyond belief that someone could come to the launch of a report on anti-Semitism in the Labour Party and espouse such vile conspiracy theories about Jewish people, which were ironically highlighted as such in Ms Chakrabarti’s report, while the leader of my own party stood by and did absolutely nothing,” Ms Smeeth said.
“People like this have no place in our party or our movement and must be opposed. Until today I had made no public comment about Jeremy’s ability to lead our party, but the fact that he failed to intervene is final proof for me that he is unfit to lead, and that a Labour Party under his stewardship cannot be a safe space for British Jews.
The row overshadowed the launch of the report, which was sparked by a row over alleged racist remarks that led to the suspension of high-profile figures like MP Naz Shah and former London mayor Ken Livingstone.
Mr Corbyn was forced to deny comparing Israel and Islamic State after telling the event: “Our Jewish friends are no more responsible for the actions of Israel or the Netanyahu government than our Muslim friends are for those of various self-styled Islamic states or organisations”.
Insisting he was “not” likening the Israeli state with the jihadi group, he said: “The point in the report is you shouldn’t say to somebody just because they are Jewish you must have an opinion on Israel any more than you would say to anyone who is a Muslim you must have an opinion on any vile actions that have been taken by misquoting the good name of Islam in what they do.”