NSW Premier Mike Baird has paid tribute to outgoing Community Relations Commission chief Vic Alhadeff, who has resigned over comments he made supporting Israel.
Mr Alhadeff resigned on Sunday after there were calls for him to be sacked for comments in which he defended Israel's military offensive in Gaza.
The head of the NSW Community Relations Commission had sent an email, in his capacity as CEO of the NSW Jewish Board of Deputies, saying Israel was operating with "care to avoid civilian casualties".
So far, the latest exchanges in the long-running conflict have killed more than 1000 Palestinians.
The premier has refused to criticise Mr Alhadeff.
"I just acknowledge that he had responded to the calls that you've seen across the Muslim community, the concerns, and ultimately he has spent a long part of his life working on harmony," Mr Baird said as he left the Lakemba Mosque on Monday following prayers to mark the end of Ramadan.
"It's an honourable thing that he's done in pursuit of harmony."
But Samir Dandan, president of the Lebanese Muslim Association, said it was clear that Mr Alhadeff had reached the conclusion that his position was untenable.
"We welcome the decision for him to resign," Mr Dandan said.
"Ultimately he reached an opinion that his position there was untenable and he had to step down to ensure the community relations ethos within ethnic and religious groups in the state of NSW continues."
The email sent by Mr Alhadeff defended Israel's military offensive in Gaza, and said Israel would "do whatever is needed to defend its citizens".
A Ramadan event hosted by Mr Baird last week was boycotted by some community groups, including the Lebanese Muslim Association and the Australian Arabic Council.
Later on Monday, Mr Baird said his focus now was on finding a new CRC chief who would be "passionate about working across every community across this state and passionate about bringing harmony".
Speaking to reporters in Campbelltown in Sydney's southwest, the premier wouldn't comment directly on criticism he has faced in not acting earlier to ease tensions with the Muslim community.
"My role is to bring harmony across every community - I'll continue to do that," he said.
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