Malaysian Muslim groups have called for protests when Chelsea football club visits in July because the coach, Avram Grant, and a player are Israeli.
An alliance of 21 Muslim groups is angry the Malaysian authorities have given permission for the Israelis to visit the country with the London club.
Malaysia has no diplomatic relations with Israel, and the Malay Muslim majority is strongly pro-Palestinian.
Malaysian citizens are banned by their government from visiting Israel.
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The government had threatened to refuse to give the Weekly Herald a publishing permit if it continued to use the word.
The paper’s editor said the word had long been used by Christians to refer to God in the Malay language.
The ruling was immediately condemned by civil rights and Christian groups in Malaysia, who said it infringed their right to practice their religion.
But Malaysia’s internal security department demanded the word be removed, saying only Muslims could use it.
Malaysians argue over word for ‘God’
A church and Christian newspaper in Malaysia are suing the government after it decreed that the word “Allah” can only be used by Muslims.
In the Malay language “Allah” is used to mean any god, and Christians say they have used the term for centuries.
Opponents of the ban say it is unconstitutional and unreasonable.
It is the latest in a series of religious rows in largely Muslim Malaysia, where minority groups claim their rights are being eroded.
A spokesman for the Herald, the newspaper of the Catholic Church in Malaysia, said a legal suit was filed after they received repeated official warnings that the newspaper could have its license revoked if it continued to use the word.
“We are of the view that we have the right to use the word ‘Allah’,” said editor Rev Lawrence Andrew.