In a statement released on Friday, the FAM did not confirm the abuse took place at the National Stadium in Kuala Lumpur on July 21 but said that if it did, it was only from a small minority of the 80,000 supporters in attendance.
"The FA of Malaysia would like to strongly register that we do not condone any form of racism in football," the statement read.
"If such an incident did happen we would like to apologise to the player concerned and also to Chelsea FC.
"From our initial observations, if such an incident took place, it would have involved a small section of spectators at the match. This surely does not reflect the feelings of the majority of fans in this football-loving country."
Malaysia is a predominantly Muslim country of 28 million and has no diplomatic ties with Israel.
Chelsea did not make a complaint after the match and have since continued their pre-season tour in Hong Kong, where they released a strongly worded statement on Wednesday concerning the alleged incidents.
"We believe Yossi was subjected to anti-Semitic abuse by a number of supporters at the game," Chelsea said. "Such behavior is offensive, totally unacceptable and has no place in football."
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