The highest-profile academic to join the growing boycott movement, Professor Hawking's decision was based on "his knowledge of Palestine".
But the Israeli government branded as hypocrisy the boycott by Hawking, whose book A Brief History of Time has sold more than 10 million copies.
"This is a case of a brief history of hypocrisy," Israel's spokesman Yigal Palmor told The Australian. "It is a shame someone like Hawking would add another brick in the wall to alienation and confrontation rather than do something constructive for peace."
Announcing the boycott, the British Committee for the Universities of Palestine said the decision by Hawking, 71, was due to "his independent decision to respect the boycott, based upon his knowledge of Palestine, and on the unanimous advice of his own academic contacts there".
The Shurat Hadin Israel Law Centre said the Israeli Presidential Conference, hosted by President Shimon Peres and that Hawking was boycotting, featured international personalities and attracted thousands of participants.
"Hawking's decision to join the boycott of Israel is quite hypocritical for an individual who prides himself on his own intellectual accomplishment," the centre director Nitsana Darshan-Leitner said in a statement. "His whole computer-based communication system runs on a chip designed by Israel's Intel team. I suggest that if he truly wants to pull out of Israel, he should also pull out his Intel Core i7 from his tablet."
The debate about whether to boycott Israel over its occupation of the Palestinian territories has caused divisions within cultural, academic and trade union bodies internationally.
"This is not a South Africa-like situation in any way. By boycotting Israel, all you achieve is more alienation," Mr Palmor said. "