Sharon also told his cabinet on Sunday that envoy Zvi Mazel had struck a blow against what he claimed is "anti-Semitism".
Israeli expatriate artist Dror Feiler created the Snow White and the Madness of Truth exhibit. In a rectangular basin filled with red fluid - depicting blood - floats a boat called Snovit (Snow White in Swedish).
It carries a portrait of resistance fighter Hanadi Jaradat, who detonated explosives at a restaurant in Israel last October, leaving 22 Israelis dead. She also died in the blast.
Mazel, attending the opening of an art exhibition on Friday linked to an anti-genocide conference in Sweden, disconnected the electrical cables of spotlights that surrounded the work, shoving one of the lights into the basin. It caused the installation to short circuit.
Mazel was asked by museum director Kristian Berg to leave.
The outburst triggered a diplomatic spat between Israel and Sweden.
The museum has refused to
remove the exhibit
The incident occurred at the opening of the Making Differences exhibit, part of an upcoming international conference on genocide hosted by the Swedish government and in which Israel is scheduled to participate.
Dror described Mazel as "an intellectual dwarf".
Sharon devoted his public opening remarks at the start of the weekly cabinet meeting to defending Mazel.
"I called the Israeli ambassador... and thanked him for his stand against the growing wave of anti-Semitism", the prime minister said. "I told him the government stands behind him."
In Israel many expressed outrage at the artwork's use of a fairy tale theme in connection with a blast.
One right-wing legislator from Haifa, where the bombing took place, said he would lobby the city to change the name of its Sweden Street in protest.
Feiler, who has lived in Sweden since 1973, is active in Jews for Israeli-Palestinian Peace, a Stockholm-based group opposed to Israeli's occupation of the West Bank and Gaza Strip.
He denied that his work glorified Jaradat's attack.
Sweden's Foreign Ministry said Mazel had behaved improperly and that it would summon him for talks on Monday to hear his side of the incident.
The Israeli Foreign Ministry summoned the Swedish ambassador to lodge its own protest.
In related developments, the head of the Stockholm museum refused on Sunday to comply with Israel's demand to dismantle the exhibit and instead invited Israel's ambassador to an open debate on the artwork.
Berg said he had not been contacted by the Swedish government since the row erupted.
"They're too wise to do something like that. It's obvious that
the government knows not to intervene in the affairs of an
independent cultural institution," he said.