He said that his Ra'am-Ta'al party intended to petition the supreme court about the decision.
"If the members of the panel had weapons, they would have shot us in the head," Tibi said.
At a recent Knesset session, called to discuss the Israeli assault on the Gaza Strip, Arab MPs condemned the conflict, which has now killed more than 900 Palestinians and injured thousands of others.
"As a humane person, I oppose targeting civilians wherever they are. Naturally, however, every time an Arab is injured it hurts me more because we are members of the same nation," Tibi told the Knesset.
In response, Avigdor Lieberman, the leader of the Yisrael Beiteinu party which petitioned for the Arab parties to be barred, described the Arab MPs as a "fifth column" - a connotation to a group typically clandestinely undermining a nation.
Tibi responded by calling him a "fascist", while Talab al-Sana, another Arab MP, was removed from the meeting after repeatedly interrupting Lieberman's speech.
Zahalka had boycotted the Knesset session saying he was not willing to take part in a "celebration of death".
The two parties are the only exclusively Arab blocs in the Israeli Knesset, however the decision does not affect Arabs in predominantly Jewish parties or the communist party.
Together they hold seven of the 120 parliamentary seats.
About one-fifth of Israel's seven million citizens are Arabs with full citizenship rights, but have suffered due to discrimination and poverty.
Most are descended from the 160,000 Palestinians who remained in Israel after its creation in 1948.