Philippe Sulmont, 82, was found guilty of "provoking discrimination, hatred or violence" for comments he made in a letter to his parishioners in the northern town of Domqueur at the end of 2002.
"The Asiatics proliferate and invade our land, bringing with them an ideology that threatens the whole world," he wrote.
"Indeed I would add there is no such thing as 'moderate' Islam. All the populations infected by the Muslim religion are indoctrinated by the Quran - a holy book which is the manual for the extension of the kingdom of the devil at the expense of the kingdom of Christ," he said.
Sulmont was also ordered to give a symbolic one euro in damages to the League of Human Rights, which brought the case, and to pay for the judgement to be published in two local newspapers.