Lib Dem MP David Ward has had the party whip withdrawn over comments he made about Israel.
He posted a tweet at the weekend calling the country an "apartheid state" and saying that "Zionists" were "losing the battle".
It comes after a long-running dispute with the party's leadership over his use of language and comments he made about "the Jews".
Mr Ward said he would not apologise for his tweet.
The Board of Deputies of British Jews said his suspension from the Lib Dem parliamentary party, which lasts until 13 September, was "too little, too late" and "an empty gesture".
'Strength of feeling'
Mr Ward, MP for Bradford East, wrote on his website in January that he was "saddened that the Jews, who suffered unbelievable levels of persecution during the Holocaust, could within a few years of liberation from the death camps, be inflicting atrocities on Palestinians in the new State of Israel and continue to do so on a daily basis in the West Bank and Gaza".
This led to a complaint to the Lib Dems from the Holocaust Educational Trust.
At the weekend, Mr Ward posted a tweet, asking: "Am I wrong or are am I right? At long last the #Zionists are losing the battle - how long can the #apartheid State of #Israel last?"
Following a meeting on Wednesday with Mr Clegg and chief whip Alistair Carmichael, the party whip was withdrawn until 13 September.
This means he has been expelled from the parliamentary party, although the Commons will rise later on Thursday for the MPs' summer break, which ends on 2 September.
In a letter to Mr Ward, Mr Carmichael wrote that he had felt "immense disappointment" at the latest comments.
He said: "We were in unanimous agreement that questioning the continued existence of the state of Israel fails the test of language that is 'proportionate and precise'.
"We want to be clear with you that in this process we are not concerned about your views and opinions on the policies of present or previous Israeli governments, nor the situation in the Israeli-occupied territories, nor the strength of feeling with which your views are held.
"As we have sought to impress upon you repeatedly, we are having to decide on whether language you chose to use in January and February, and now this month, is language which brings the party into disrepute or harms the interests of the party."
Mr Carmichael continued: "It is also immensely frustrating for us to find ourselves constantly responding to questions about disproportionate and imprecise language from you.
"These interventions cause considerable offence rather than addressing questions of political substance about the plight of the Palestinian people and the right of Israel's citizens to live a life free of violence."
But, questioned about his tweet at the weekend, Mr Ward said: "I will not apologise for describing Israel as an 'apartheid state'. I don't know how you can describe it as anything else.
"I am genuinely quite shocked at the reaction to the kind of thing many people say."
Mr Ward initially defended the comments he made in January, saying the party's response - reprimanding him - had been "regrettable", but later apologised for the "unintended offence" which his words had caused.
He also insisted that neither he nor his comments had been anti-Semitic.
Mr Ward, who visited the West Bank in December last year, denied in March that he had been ordered by the party leadership to attend "language classes".
Following the withdrawal of the whip, Jonathan Arkush, vice-president of the Board of Deputies of British Jews, said: "We note that the Liberal Democrats have at last taken some action to address the completely inappropriate and offensive comments that he has made.
"However, suspension of the whip for just two months when Parliament is not sitting is too little, too late. It is a token and frankly an empty gesture."
Karen Pollock, chief executive of the Holocaust Educational Trust, said: "David Ward has never fully apologised for his comments, which deliberately abused the memory of the Holocaust and caused deep pain and offence.
"It is about time the whip was withdrawn, but the timing allows Mr Ward to repeat his unacceptable views when Parliament returns in the autumn."