Ido Hartuv, spokesman for Israel's tourism minister, said officials are furious with Robertson's suggestion that the stroke was retribution for Sharon's withdrawal from the Gaza Strip last summer. "We can't accept this kind of statement," Hartuv said.
Robertson is leading a group of evangelicals who have pledged to raise $50 million to build the Christian Heritage Center in Israel's northern Galilee region, where tradition says Jesus lived and taught.
Under a tentative agreement, Robertson's group was to put up the funding, while Israel would provide land and infrastructure. Israeli officials believe the project will generate tens of millions of tourism dollars.
But the project now is in question in light of Robertson's comments, said Hartuv.
"We will not do business with him, only with other evangelicals who don't back these comments," Hartuv said. "We will do business with other evangelical leaders, friends of Israel, but not with him."
Israel has developed strong ties with American Evangelicals because of their firm support for the Jewish state, CBS News correspondent Robert Berger reports.
Robertson, whose television ministry is based in Virginia Beach, Virginia, did not immediately return a phone call from The Associated Press on Wednesday.
A day afteron Jan. 4, Robertson suggested the prime minister was being punished for "dividing God's land," a reference to the August pullout from the Gaza Strip and four West Bank settlements.
"God considers this land to be his," Robertson said on his TV program "The 700 Club." "You read the Bible and he says 'This is my land,' and for any prime minister of Israel who decides he is going to carve it up and give it away, God says, 'No, this is mine."'
Robertson's comments also drew condemnation from other Christian leaders and even U.S. President George W. Bush.
"Those comments areand offensive and really don't have a place in this or any other debate," presidential spokesman Trent Duffy said as President Bush traveled to Chicago for a speech.
The ministry's decision was first reported in Wednesday's edition of The Jerusalem Post.
Robertson's Christian Heritage Center was to be tucked away in 35 acres of rolling Galilee hills, near key Christian sites such as Capernaum, the Mount of the Beatitudes, where tradition says Jesus delivered the Sermon of the Mount, and Tabgha on the shores of the Sea of Galilee, where Christians believe Jesus performed the miracle of the loaves and fish.
The project underlines how ties have strengthened in recent years between Israel and evangelical Christian groups that support the Jewish state.
Israel was considering leasing the land to the Christians for free. Tourism Minister Avraham Hirschson predicted it would annually draw up to 1 million pilgrims who would spend $1.5 billion in Israel and support about 40,000 jobs.
Hirschson, however, is one of Sharon's biggest supporters, and a member of the centrist Kadima party recently founded by the prime minister.
Hartuv left the door open to continuing the project, but only with people who don't back Robertson's statements.
"We want to see who in the group supports his (Robertson's) statements. Those who support the statements cannot do business with us. Those that publicly support Ariel Sharon's recovery ... are welcome to do business with us," Hartuv said. "We have to check this very, very carefully."