Orban's remarks over a year ago praising Nazi collaborator Miklos Horthy - who ruled Hungary after World War I and throughout most of World War II and introduced anti-Semitic laws - have drawn fierce criticism.
For the past year, Orban has been accused by Hungary's Jewish community of leading an "anti-Semitic propaganda campaign" against George Soros, an global Jewish "philanthropist" and champion of "left-wing" causes.
"We both understand that the threat of radical Islam is a real one", said Netanyahu.
"I don't think that you have to be a Holocaust survivor or a Hungarian to be here to say that Orban has no business coming here", she said. "It certainly endangers us and our Arab neighbors".
Despite global Jewish condemnation of those remarks, Netanyahu praised Orban for combatting anti-Semitism and thanked him for Hungary's pro-Israel stance. Later, police removed the protesters who had detained the Hungarian leader.
But Netanyahu say the two leaders are on the same wave length.
Netanyahu visited Hungary previous year - the first visit by an Israeli premier since the 1980s - and was warmly received by Orban.
A statement released by the Israeli foreign ministry welcomed Orban, saying his visit will help promote ties between the two countries and strengthen the European support for Israel.
The Israeli premier has taken flak in Israel for embracing Orban amid the Hungarian leader's increasing authoritarianism, as well as for striking a deal with Poland over a controversial Holocaust speech law.
After meeting with Netanyahu, Orban met with President Reuven Rivlin in Jerusalem.
Hungarian Prime Minister Viktor Orban (C) flanked by his wife (L) and Rabbi of the Western Wall Shmuel Rabinovitch (R) listens to historical account of Jerusalem's Temple Mount during his visit to Israel.
The middle-of-the road Yediot Aharonot had harsh words for Mr Orban's visit, which a columnist said mirrored Israel's slide into authoritarianism.
The trip is a striking sign of burgeoning ties between Netanyahu and the controversial Hungarian statesman, who has been accused of playing up anti-Semitic stereotypes, and comes following reports of Israeli efforts to lobby the USA to end isolation of the man considered a symbol of Europe's move toward the hard right.
Orban and Israeli Prime Minister Benjamin Netanyahu have found common cause in their right-wing views despite controversy surrounding the Hungarian leader's nationalist rhetoric.
Amnesty International in Israel organized a protest against Orban's visit to the memorial, rejecting "restraint toward the words of praise for anti-Semitism, for racism and anti-democratic persecution".