The New York-based World Jewish Congress (WJC) said Italy had taken a "principled decision".
Ronald Lauder, president of the WJC, said: "Italy has given a strong signal, which should be a rallying call for other European Union countries."
Critics of the conference also object to sections of the final declaration which they say would limit freedom of religion or speech.
Majority Muslim countries, where residents are angry over cartoons and films attacking Muslims, have been campaigning for wording that would equate criticism of a religious faith with a violation of human rights.
The April 20-25 meeting is designed to review progress in fighting racism since the inaugural summit on racism in South Africa in 2001.
Israel was attacked during that meeting and anti-Israel demonstrations were held at a parallel conference of non-governmental organisations.
The US and Israel walked out over a draft resolution that criticised Israel and likened Zionism, the movement to establish and maintain a Jewish state, to racism.
Last week, the administration of Barack Obama, the US president, said Washington would stay away from this year's meeting unless its final document is changed to drop all references to Israel and the defamation of religion.