The 10-page document says that "promises about the land of Israel were never intended to be taken literally, or as applying to a defined geographical territory" and the Bible should not be used to settle conflicts over land.
The report was produced by the Church's Church and Society Council and will be debated at this month's meeting of the General Assembly, the body which makes laws determining how the Church of Scotland operates.
It has provoked a fiery response from the UK's Jewish community, including the Scottish Council of Jewish Communities which described the report as an "ignorant and tendentious document masquerading as a theological statement".
Jewish representatives met officials from the Church of Scotland today to discuss the row, leading the Church to reaffirm its "long-held position of the right of Israel to exist".
Israeli ambassador to the UK Daniel Taub said in response to the document, which can be viewed on the Church's website: "This report not only plays into extremist political positions, but negates and belittles the deeply held Jewish attachment to the land of Israel in a way which is truly hurtful.
"If a document of this nature is adopted by the Church of Scotland it would mark a significant step backwards for the forces of tolerance and peace in our region."
The report's introduction states that the "widespread assumption" that the Bible supports a Jewish state "raises an increasing number of difficulties and current Israeli policies regarding the Palestinians have sharpened this questioning".
The document asks: "Would the Jewish people today have a fairer claim to the land if they dealt justly with the Palestinians?" and suggests a belief among some Jewish people that they have a right to the land of Israel "as compensation for the suffering of the Holocaust".
It concludes: "From this examination of the various views in the Bible about the relation of land to the people of God, it can be concluded that Christians should not be supporting any claims by Jewish or any other people to an exclusive or even privileged divine right to possess particular territory.
"It is a misuse of the Bible to use it as a topographic guide to settle contemporary conflicts over land."
The Scottish Council of Jewish Communities has called on the Church to withdraw the text titled The Inheritance of Abraham? A report on the 'promised land' from the forthcoming General Assembly.
It said in a website statement published several days ago : "It reads like an Inquisition-era polemic against Jews and Judaism. It is biased, weak on sources, and contradictory.
"The arrogance of telling the Jewish people how to interpret Jewish texts and Jewish theology is breathtaking."
The Church of Scotland said tonight it had held "useful discussions" facilitated by the Council of Christians and Jews this afternoon.
A Church statement said: "We agreed that the drafting of the report has given cause for concern and misunderstanding of its position and requires a new introduction to set the context for the report and give clarity about some of the language used.
"In particular the Church of Scotland needs to be explicit about some things that are implicit policies of the Church: there is no change in the Church of Scotland's long held position of the rights of Israel to exist; the Church condemns all violence and acts of terrorism where they happen around the world; the Church condemns all things that create a culture of anti-Semitism.
"The concern of the Church about injustices faced by the Palestinian people in the Occupied Palestinian Territories remain firm but that concern should not be misunderstood as questioning the right of the State of Israel to exist.
"Sitting round the table and listening to each other more deeply has created a real opportunity for both communities to better understand each other and that this report now becomes a catalyst for continued and growing conversation."