The president of the Australian National Imams Council, Sheikh Shady Alsuleiman, was among a group of religious leaders and prominent Muslims invited to join Mr Turnbull for an iftar to mark the holy month of Ramadan.
Ramadan, to Muslims, is a time of forgiveness, reflection and spiritual renewal.
Now, in a bid for unity, Prime Minister Malcolm Turnbull has become the first Australian leader to host the feast called iftar that marks the end of each fasting day during Ramadan.
"The aim of extremists, including those committing violence through a warped and nihilist interpretation of religion, is to divide us and to turn our citizens against each other. But we will not let them win. We must stand together, like we do tonight, as one Australian family, united against terrorism, racism, discrimination and violence."
But Mr Turnbull's hopes of unity were marred by the attendance of Sheikh Shady Alsuleiman and his controversial views linking homosexuality to diseases.
"(It's) homosexuality that's spreading all these diseases ... you know, let's not deny the fact. Don't call it (a case of) freedom, you know? These are evil actions that bring evil outcomes to our society."
Sheik Alsuleiman, founder of United Muslims Australia, shared those views in an online video posted in 2013.
In the video, he said, if homosexuality was out in the open "amongst a tribe, Allah will send on them diseases."
Industry Minister Christopher Pyne has told the Nine Network inviting the cleric was a mistake and Mr Turnbull acted on it immediately.
"And as soon as he was aware that the preacher was there, he condemned his views in very firm tones at the actual dinner, in front of the other guests. So Malcolm Turnbull acted entirely appropriately. I don't know how these lists of invitations are put together. There's a protocol department somewhere that does that kind of work and, obviously, they've made a mistake."
Federal Labor MP Anthony Albanese has agreed.
"Clearly, this is an absolute stuff-up. There's no role for promoting someone who's preaching hate, and that's clearly what this person was doing."
The Prime Minister has since said he regrets the invitation of the Sheikh.
He had told Radio 3AW the Sheikh's earlier comments were wrong and unacceptable but he, as prime minister, was unaware of his controversial views.
"I do regret him being invited. He was invited in his official capacity, and the guest list was assembled by my department of PMC (Prime Minister and Cabinet). If I had been aware that he'd made those remarks about homosexuals and gay people, he would not have been invited. And as soon as they were drawn to my attention I, of course, made my condemnation of them very clear."
The Sheikh has since rejected the idea that he wanted to punish the gay community.
The controversy comes just days after one of the worst mass shootings in modern history in the United States, at a gay nightclub in Orlando, Florida.
Omar Mateen, allegedly a supporter of the self-proclaimed Islamic State, killed 49 people in the massacre.
The Prime Minister denounced the shooting at the Islamic feast.
"Acts of terror like Sunday's massacre in Orlando are perpetrated to divide us along lines of race, religion, sect and sexuality. But that kind of hatred and division must not prevail."
At the dinner, Mr Turnbull reiterated his sentiments on unity and respect to the gathering of about 60 people, which included Gold Logie winner Waleed Aly and AFL player Bachar Houli.
"In a world of discord and disharmony, in a world where there is so much hatred, this is a country which has successfully built a society that is diverse, that is multicultural and that is founded on mutual respect, and, when you distil that concept of mutual respect, when you distil it, right at the core is the value most important and closest to God, and that is love. Our nation is built on a foundation of mutual respect, love and respect for our fellow Australians, a love and respect for humanity."
And speaking directly to the members of the Australian Muslim community, Mr Turnbull said every person is valued and respected.
"You are an integral part of an Australian family that rests on the essential foundation of mutual respect and understanding. Every one of us is enriched by the culture and the faiths of our friends and neighbours."
