Ray Hanania was told his act had been dropped hours before opening for Mason at Zanies comedy club in Chicago on Tuesday night.

"It's not exactly like he's just an Arab-American - this guy's a Palestinian," said Mason's manager, Jyll Rosenfeld. "Jackie does not feel comfortable having a Palestinian open for him. Right now it's a very sensitive thing. It's just not a good idea."

Hanania, a 49-year-old journalist of Palestinian descent who has a Jewish wife, is a Vietnam veteran and author of the book I'm Glad I Look Like a Terrorist: Growing Up Arab in America, said he began performing comedy after September 11 to help bring people together. He would not mind being dropped if it were because he was "a lousy comedian", he said.

Ali Alarabi, president of the United Arab-American League, called the decision "an act of hate and racism against Palestinians, and we demand an apology".

Mason, 71, whose one-man Broadway show ran for 12 years, is a strong supporter of military action in the occupied territories. He has received at least one award from Israel.

In June, he wrote in the Jewish World Review: "Let's forget all the nonsense about Arafat being a partner in peace... Sharon, having made one mistake by not going in with guns blazing as we did in Afghanistan, should not believe that history allows for the same mistake twice."

Hanania says his role model is "the popular television Arab stand-up Jerry Seinfeld", adding: "It's true. Seinfeld's mother is a Syrian Jew from Damascus, and that makes him half-Arab. What a mensch he is!"

Ms Rosenfeld said the decision was "nothing personal... don't turn this into a racist issue, because it's not. We just felt this is not a good idea at this time."