Labour's National Executive Committee is to review comments made by Ken Livingstone in the wake of his suspension from the party, Jeremy Corbyn has said.
The Labour Leader called Mr Livingstone's comments "grossly insensitive" and said it is "deeply disappointing" he has not apologised.
Mr Corbyn's remarks follow Labour deputy leader Tom Watson saying the failure to expel Ken Livingstone from the party "shames us all".
The Chief Rabbi also accused the party of failing the Jewish community by not expelling Mr Livingstone from the party.
The Labour veteran was suspended in April last year after claiming Hitler supported Zionism in the 1930s before he "went mad and ended up killing six million Jews".
Mr Livingstone insisted he had never said Hitler was a Zionist, only that Hitler had supported Zionism at one time.
The decision by a disciplinary panel to suspend Mr Livingstone for a further year because of the comments has sparked outrage from a number of Labour MPs.
Mr Livingstone's reaction has also been widely criticised.
Mr Livingstone has vowed to campaign against the suspension, insisting he had told the historical truth, and would now consult lawyers on his legal position.
Comparing the disciplinary hearing to a North Korean court, he said: "I expected them to expel me so I've now got to consider whether I challenge this legally or just live with it.
"You can't apologise for telling the truth. I will be launching a campaign to overturn my suspension of party membership."
Mr Corbyn said: "Ken Livingstone’s comments have been grossly insensitive, and he has caused deep offence and hurt to the Jewish community.
“Labour's independently elected National Constitutional Committee has found Ken guilty of bringing the party into disrepute and suspended him for two years.
“It is deeply disappointing that, despite his long record of standing up to racism, Ken has failed to acknowledge or apologise for the hurt he has caused. Many people are understandably upset that he has continued to make offensive remarks which could open him to further disciplinary action.
“Since initiating the disciplinary process, I have not interfered with it and respect the independence of the party’s disciplinary bodies. But Ken’s subsequent comments and actions will now be considered by the National Executive Committee after representations from party members.”
Chief Rabbi Ephraim Mirvis said: "This was a chance for the Labour Party to show that it would not tolerate wilful and unapologetic baiting of the Jewish community, by shamefully using the Holocaust as a tool with which to inflict the maximum amount of offence.
"Worryingly, the party has yet again failed to show that it is sufficiently serious about tackling the scourge of anti-Semitism."
Mr Watson said it is "incomprehensible" that members of the panel "found Ken Livingstone guilty of such serious charges, and then concluded that he can remain a member of the Labour Party".
The deputy leader said: "When I read the words of Chief Rabbi Mirvis, who says that 'the Labour Party has failed the Jewish community, it has failed its members and it has failed all those who believe in zero-tolerance of anti-Semitism', I can't disagree with him.
"I wish I could, but I can't. I am ashamed that we have allowed Mr Livingstone to cause such distress."