Libya's prime minister suspended Foreign Minister Najla Mangoush on Sunday and referred her for investigation after Israel said its Foreign Minister Eli Cohen had met her last week despite the countries not having formal relations.
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Israel's statement on the meeting, in which it said the ministers had discussed possible cooperation, prompted small protests in Libya, which does not recognise Israel.
Libya's Foreign Ministry said Mangoush had rejected a meeting with representatives of Israel and that what had occurred was "an unprepared, casual encounter during a meeting at Italy's Foreign Affairs Ministry."
The Libyan ministry's statement said the interaction did not include "any discussions, agreements or consultations" and added the ministry "renews its complete and absolute rejection of normalisation" with Israel.
Since 2020 Israel has moved to normalise ties with the United Arab Emirates, Bahrain, Morocco and Sudan through the so-called "Abraham accords" brokered by the United States.
"I spoke with the foreign minister about the great potential for the two countries from their relations," Israel's Cohen said in a statement.
The meeting was facilitated by Italian Foreign Minister Antonio Tajani, Israel's foreign ministry said, adding they had discussed possible cooperation and Israeli aid in humanitarian issues, agriculture and water management.
Cohen said he had spoken to Mangoush about the importance of preserving Jewish heritage in Libya.
Libyan foreign policy is complicated by its years of conflict and its bitter internal divisions over control of government and the legitimacy of any moves made by the Tripoli administration.
