The Iranian leader is scheduled to deliver a speech at the so-called "Durban 2" conference in Geneva Monday.
"There is no reason in the world to meet with a Holocaust denier and the president of a state that exports terrorism, hatred, and anti-Semitism," a source in Jerusalem said.
The official added that Ahmadinejad manifestly rejects the State of Israel's very existence, while representing everything the international community should be shunning.
"A meeting with Ahmadinejad gravely undermines the moral international coalition against Iran," he said. "The meeting with the Swiss president constitutes a dishonorable move and it would be appropriate not to proceed with it. No national leader who respects himself should be shaking the hand of the Holocaust denier from Tehran."
On Friday it was reported that diplomats reached agreement on a declaration for next week's politically charged United Nations conference on racism in Geneva, adding to the pressure on Washington and Brussels to decide whether to attend.
The 16-page text omits references to Israel, Zionism, the Middle East conflict and other divisive issues that have made Western powers shy away from the "Durban 2" conference.
Yitzhak Benhorin contributed to the story