It is unacceptable, says France's Interior Minister Bruno Retailleau to Sud Radio.
The flag covered large parts of one of the short sides of Parc des Princes and was rolled out just before kick-off on Wednesday evening. At the bottom, it read: "War on the pitch, but peace in the world". Next Thursday, France and Israel will meet in the Nations League at Stade de France in Paris.
Yonathan Arfi, chairman of the Council of Jewish Institutions in France, describes the flag as "scandalous", reports news agency AFP.
According to Interior Minister Retailleau, it may be a matter of punishing PSG, and he writes on X:
"Such messages are contrary to the rules of the league and Uefa. If this happens again, we must consider banning tifos at clubs that do not follow the rules".
The club says in a statement that they did not know about the message on the supporters' flag in advance.
"The club strongly opposes any form of political message in the stadium", writes PSG.