The flag has been stuck on the wall among others inside the 6000-seat conference hall at the International Convention Centre.
Another has been hung in the media centre.
An Israeli flag was also spotted last week on a monument put up close to the centre to mark the occasion. It has since been covered up, possibly awaiting an unveiling ceremony.
The gesture should by no means be read as a sign that the United Arab Emirates (UAE) is forging ties with the Jewish state, said Dr Abd al-Khaliq Abd Allah, a political science professor at Emirates University.
“The UAE has never wanted to establish ties with Israel. Throughout its history it’s been strongly anti-normalisation,” he told Aljazeera Net.
The invitations are extended by the World Bank and not the UAE government, said Abd Allah.
“These are awkward times but this is beyond them (UAE) and it was an international decision,” he said.
Israel’s Binyamin Netanyahu will not join other finance ministers in Dubai, said his office on Tuesday.
Instead, the country’s delegation will be led by Bank of Israel Governor David Klein, a relatively less controversial figure than the former prime minister.
Presence a “precedent”
Security preparations underway
The Dubai police general in charge of security for the world’s financial elite Abd al-Aziz al-Bannai, played down the Israeli presence.
He said an Israeli delegation in the UAE would be a “precedent” only because that was the first time the World Bank and IMF were holding their annual meeting in an Arab country.
“It is well known that all member states participate,” said al-Bannai. “Invitations were extended by the secretariat of the World Bank and the International Monetary Fund, not the UAE.”
The UAE has taken pains to stress the Jewish state will attend the meeting at the invitation of the World Bank and IMF.
Members of the organising committee compared Dubai’s hosting of the meeting to the presence of the United Nations in New York, saying the emirate is only providing a setting, but does not decide what goes on during the conference.
“I am a military man, I don’t discuss politics, but the UAE’s policy is well-known. It has no links with Israel,” said al-Bannai.
He denied reports that a photographer was arrested for attempting to take a picture of the Israeli flag on the monument dedicated to the meeting.
Asked if Israelis would be provided extra security, Bannai said: “Let’s be realistic, the situation in the region (warrants tighter measures for some delegations) and this does not apply only to Israel.”