Hundreds gathered for a moment of silence in memory of the murdered athletes, but the gesture did not take place at the site of the Olympic Games, or in the Olympic village. Instead it was held at the periphery of the events.
The ceremony was held by the Israeli embassy in cooperation with the local Jewish community at London's famous Guild Hall.
Among the dignitaries present at the ceremony were Olympics Organizing Committee Chairman Sebastian Coe, London Mayor Boris Johnson, Israel's Ambassador to the UK Daniel Taub, Minister Limor Livnat, Alex Gilady, the Israeli Olympics team and leaders of the Jewish and Israeli community in Britain.
Chaim Topol emceed the event and singer David D'or took part in the evening's commemoration. The Israeli Olympic team entered the hall to roaring applause.
Pictures of Muncih victims at entrance to Guild Hall (Photo: AP)
While the event could be seen as a wide acceptance of the need to remember the fallen athletes, the IOC's refusal to dedicate a moment of silence at the Olympics opening ceremony overshadowed the evening.
British Prime Minister David Cameron attended the ceremony and said: “As the world comes together in London to celebrate the games and the values it represents, it is right that we should stop and remember the 11 Israeli athletes who so tragically lost their lives when those values came under attack in Munich 40 years ago,” he said.
Cameron added: “It was a sickening act of terrorism that betrayed everything the Olympic movement stands for and everything that we in Britain believe in.
“It was a truly shocking act of evil. A crime against the Jewish people. A crime against humanity. A crime the world must never forget.”
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The British PM also mentioned the recent terror attack in Bulgaria: "We remember too the six Israeli holiday makers brutally murdered by a suicide bomber in Bulgaria just last month. And let me say that we in Britain will do everything we can in helping to hunt down those responsible for that attack."
Cameron went on to say: "Seven years on from 7/7 (terror attacks) I am proud that as we speak, this great city of London - probably the most diverse city in the world - is hosting athletes from 204 nations.
"And I am delighted that a strong Israeli team is among them." Cameron concluded his speech by saying "Blessed be their memories" in Hebrew.
Munich victims' widows with ambassador (Photo: Israeli Embassy)
Ilana Romano, widow of slain Olympian Yossef Romano said: "We were touched by the prime minister's speech. He gave us hope that our voices will be heard. "
In a speech, which won her a standing ovation, Ankie Spitzer said: "Is the IOC only interested in power, money and politics (that) they have forgotten what they are supposed to promote: peace brotherhood and fair play?
"Shame on you International Olympic Committee because you have forsaken the 11 members of your Olympic family, you are discriminating against them only because they are Israelis and Jews."
She added: "We will not stop our battle to have a moment of silence for the victims at the Olympics opening ceremonies, all the more so after they dedicated a moment of silence to the British victims of terror at last week's opening ceremony. The more the Olympics Committee entrenches itself in its refusal the more we will struggle."
Culture and Sports Minister Limor Livnat also spoke at the event, criticizing the IOC decision: "World leaders called on the IOC to hold a public moment of silence at the ceremony. Sadly, their pleas were rejected.
“That is why, during the speeches at the opening ceremony, I insisted on my own moment of silence. But I was not alone. Millions, all over the world, lovers of sports and lovers of humanity, were with me in silent awe. In my silence, I spoke for them. In deafening silence, we unite with the memory of our eleven athletes."
International Olympic Committee President Jacques Rogge, who was the target of a great deal of criticism for the IOC's decision said everybody remembered the "horrific events of 1972" even if they had not yet been born, and he described the killings as "the worst days of the Olympic movement."
"We are all here today because we share a duty those innocent victims and to history to make sure the lessons of 1972 are never forgotten ... we are here to speak with one voice against terrorism," he added but did not comment on the refusal to hold a moment of silence for the slain Olympians.
Reuters and AP contributed to the report