The International Olympic Committee paid a surprise tribute to the 11 Israeli team members who were killed at the 1972 Munich Games on Monday, marking the event for the first time in an Olympic village.
IOC President Jacques Rogge, who on Saturday had ruled out marking the 40th anniversary of the Munich massacre at the London Games opening ceremony, said the 11 victims deserved to be remembered.
The IOC has never marked the event at any of the previous Games' athletes' villages.
A minute's silence was observed after Rogge's comments.
Among those at the ceremony were Sebastian Coe, chairman of the London Olympic organising committee, London Mayor Boris Johnson, Culture Secretary Jeremy Hunt and several IOC officials.
"I would like to start today's ceremony by honouring the memory of 11 Israeli Olympians who shared the ideals and have brought us together in this beautiful Olympic Village" said Rogge.
"The 11 victims of the Munich tragedy believed in that vision. They came to Munich in the spirit of peace and solidarity. We owe it to them to keep that spirit alive and to remember them."
Rogge said that while sport had the ability to unite, it could not solve all the world's problems.
"As the event of 40 years ago reminds us, sport is not immune from, and cannot cure, all the ills of the world."
Following the ceremony London Mayor Johnson pumped his fist and said: "Great speech."
"It was a spontaneous suggestion," Rogge told a small group of reporters after his speech. "This is indeed the first time that it has happened in the Olympic village."
"I could not speak here about peace and sport without reminding what happened 40 years ago," said Rogge, who competed at the Munich Olympics as a sailor.
Family members of the athletes, coaches and officials who were killed by Palestinian gunmen during the Munich Olympics have tried for four decades to persuade the IOC to organise an official commemoration.
Their calls were backed in recent days by U.S. President Barack Obama as well as other politicians around the world.
Rogge said his decision to mark that anniversary in such a way was not aimed at ending calls for a minute's silence during the opening ceremony.
"The intention was not to calm anyone," he said.