A frontrunner in the race to be UKIP's next leader is probably "too extreme" to be allowed to stand, a party AM has said.
Anne Marie Waters, one of several hopefuls who face vetting ahead of the election, has described Islam as evil.
AM David Rowlands said Ms Waters was "not the image" he wanted UKIP to have but Ms Waters claimed the party was trying to "ostracise" her.
Ms Waters said she was "not a racist" at a hustings in Newport on Thursday.
About 20 people attended the leadership event.
South Wales East AM Mr Rowlands, who chaired the hustings, blamed a general public weariness with politics rather than the state of the party for the low turnout.
As well as Ms Waters, other leadership hopefuls at the meeting included London assembly member David Kurten, David Allen and former UKIP councillor Ben Walker.
Nathan Gill, UKIP's MEP for Wales and an independent AM who has said the party should not become anti-Islam, is understood to be unhappy about the prospect of Ms Waters being a leadership candidate.
It has been suggested several of the party's MEPs will resign if she wins.
Ahead of the hustings Mr Rowlands told BBC Wales: "I don't even believe she will be selected [to be a candidate]."
Asked why, he said: "Because her views are too extreme. It's not the image I would want my party to have.
"I don't want us to be politically correct but I also don't think that we are there to be provocative or to offend people in what we say or in what we do.
"It would seem to me from the comments being made [by other people in UKIP] that she wouldn't get through the vetting."
Ms Waters said Mr Rowlands was "entitled to his opinion" but added: "It is only because we have been lying for so long that the truth sounds extreme, and the fact that so many of us are terrified of telling the truth, proves me right about the censorship that we now observe in the UK surrounding this issue."
She opened her statement at the hustings saying she was "not an extremist" and had never been one.
"I am not a racist or a neo-fascist," she said. She told BBC Wales she believed she would be vetted out of the candidate list.
On the BBC Sunday Politics programme earlier this year Ms Waters said she "did not like" Islam.
"The thing is a lot of people get confused on Islam and all Muslims," she said. "A lot of people think Islam equals all Muslims. It does not.
"The religion, the scriptures and how it's practiced in most of the world I find quite frankly abhorrent."
The deadline for leadership candidates to submit nominations has passed but there will be no official candidates until the vetting is complete - which is expected mid-August.
Others who have announced their intention to run but are not at the hustings in Newport include direct democracy activist John Rees Evans, London AM Peter Whittle and Scottish MEP David Coburn.
UKIP MEP Bill Etheridge withdrew his leadership bid in July, calling for "libertarian" candidates to unite against hard-liners using the party "as a vehicle for the views of the EDL (English Defence League) and the BNP (British National Party)".