The international fair, featuring 39 Israeli writers and publishers, was due to be officially opened by visiting Israeli President Shimon Peres, who described the boycott as "the most ridiculous thing I have heard in my life".
During the event four people were lightly injured after the Israeli booth at the International Paris book fair collapsed. The incident occurred after Peres entered the booth causing a fracas. The president was not injured.
Algeria, Iran, Lebanon, Morocco, Saudi Arabia, Tunisia and Yemen announced in advance they would shun the fair in response to a call from the Islamic Educational, Scientific and Cultural Organization (ISESCO).
The Morocco-based organization said last month it had urged the boycott to protest against Israel's actions against Palestinians.
"The crimes against humanity Israel is perpetrating in the Palestinian territories ... constitute, in themselves, a strong condemnation of Israel, making it unworthy of being welcomed as a guest of honor," ISESCO said in a statement.
It pointed out that Israel was being honored in the year that the Jewish state marked the 60th anniversary of its creation.
'Nothing to fear from books'
Among Israeli writers expected to take part were Amos Oz and David Grossman.
Peres, on a state visit to France, said on Wednesday: "I am against the boycott of books ... Books are written to awaken reflection, to try to make sense of ideas."
Speaking to journalists on Thursday, David Martinon, spokesman for President Nicolas Sarkozy, said the boycott was regrettable, adding: "There is nothing to fear from books."
The organizers said the object of the fair was to honor literature and denied that Israel had been chosen because of its 60th anniversary.
Christine de Mazieres, speaking for the French Publishers' association which organizes the fair, said last week: "What is happening in the Middle East is very sad, but it is not linked to our event."
She added all the countries that had withdrawn were aware Israel was being honored when they signed up and many of the Israeli writers taking part favored a Palestinian state.
A similar controversy is brewing about the May book fair in Turin, Italy, which is also highlighting Israeli works.
Adva Naftaly contributed to the report