Barely 24 hours after it emerged Mr Rahman is to face trial over claims he committed widespread voting fraud, he ordered the flag to fly ‘in support of a ceasefire and peace’.
Local residents said the council should concentrate on 'potholes and bins' and not international conflicts.
Mr Rahman was a member of the Tower Hamlets Labour Party and was its candidate to be the first directly elected mayor of the borough in 2010.
But he was expelled from the Labour party after allegations surfaced about his close links with an Islamic extremist group called the Islamic Forum of Europe.
He is accused of using illegal tactics to win the mayoral election in Tower Hamlets, East London, in May.
Just yesterday it emerged four voters had won their big to have a damaging dossier of evidence heard at a full trial. Mr Rahman has strenuously denied allegations of electoral fraud.
Today Mr Rahman risked provoking fresh controversy with his decision to fly the flag of Palestine over the town hall in Mulberry Place, off Clove Crescent.
He tweeted a photograph of the flag, with the message: ‘Palestinian flag flying at Town Hall in solidarity with #Gaza and in support of a ceasefire & peace.’
While the immediate response on Twitter appeared to be supportive, he risks angering the Jewish community in the east London borough.
It is not thought that there are any rules stopping the flying of the flying over a public building.
In a statement Mr Rahman said: 'We are flying the Palestinian flag over the town hall as a humanitarian gesture of our solidarity with the people of Gaza.
'In addition to the current military onslaught, the blockade of Gaza is causing a humanitarian catastrophe. Over 1,000 people have been killed, most of them women and children. An urgent aid corridor needs to be opened to allow those injured to receive treatment and medical care.
'We mourn the loss of life in this tragic conflict. We call on our Prime Minister to help create a lasting peace that breaks the cycle of violence between Israelis and Palestinians and prevents any further loss of innocent lives.'
An estimated 1,200 Palestinians and 55 Israelis have been killed in the conflict. Israel launched its offensive in Gaza after a surge in rocket fire from the territory.
Hamas, which controls Gaza, has said it will not stop fighting until a blockade on the area, maintained by both Israel and Egypt, is lifted.
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