Rowan Laxton, 48, head of the South Asia desk of the Foreign Office, was watching a television report about the death of a farmer killed by Israeli bombs when he exclaimed: 'F****** Israelis, f****** Jews'.
Fellow gym members Gideon Falter and William Lemaine,(Zionists) who were on a lower floor using weights, overhead Laxton and complained to staff at the gym.
Laxton, whose salary after tax is £3,000 a month, was fined at the City of Westminster Magistrates' Court after District Judge Howard Riddle found him guilty of racially aggravated harassment. He had denied the charge.
He was also ordered to pay £500 prosecution costs and a £15 victim surcharge.
In a written judgement, Judge Riddle said Laxton had been under stress on the day, and may have been oblivious to others around him.
He said: 'This was not a legitimate protest - it was an emotional reaction.
'It is hard to imagine the circumstances when saying "f****** Jews' in a gym used by other people, and overheard by two strangers 20 feet away, could be considered reasonable.'
Speaking outside the court, Mr Knowles said: 'Mr Laxton is very disappointed by the outcome of today, and he will be considering his next steps with his legal team.'
2 hours ago