At least two Irish centres in Scotland have been burned down in sectarian attacks, it was claimed.
Some community organisations were regarded as troublemakers and nervousness was expressed about songs and symbols because they could be contentious, according to a draft report from British and Irish parliamentarians.
Proposals for a St Patrick's Day parade next month in Glasgow have created community tensions amid concerns about Orange Order protests, witnesses have told the group of MSPs and MPs.
The report said: "We recognise that symbols and songs can be divisive and firmly support efforts to promote mutual understanding and tolerance but we were concerned that this nervousness might in part be fostered by a sectarian narrative which had been constructed to characterise and perhaps even demonise some of these groups."
The British/Irish Parliamentary Assembly (BIPA) includes legislators from Scotland, the Republic of Ireland, Northern Ireland, Wales and England.
A committee of members produced a report on the Irish in Scotland which prompted significant dissent and was not agreed during a plenary session in Dublin.
House of Lords peer Lord Dubs said he was saddened by the reported tensions in Scotland.
He chaired the committee of the BIPA which investigated the Irish communities and support centres in Scotland.
The draft report said: "It was distressing to hear that at least two such centres had been burnt down in what seemed to be sectarian attacks."
Labour MP for Paisley and Renfrewshire North Jim Sheridan said he had never heard of Irish centres being burnt.
He claimed the Irish should not be regarded as an ethnic minority and added public money must not be spent on a St Patrick's Day march in Glasgow.
"If people want parades up and down the streets it is entirely up to them. I don't think that the taxpayer in these austere times should be asked to pay for it."
"People need to look forward, move forward and think of a modern Scotland and stop living in the past."
The BIPA report said the idea of holding a St Patrick's Day parade in Glasgow has been a source of some community tension.
"We were told that there was some opposition to the idea because of concerns about exacerbating community tensions and that groups including the Orange Order might protest."
The document noted that Glasgow and Edinburgh have their own festivals on St Patrick's Day.
It also said the Coatbridge St Patrick's Day Festival had grown in scale during the last 12 years.
"Given Glasgow City Council's commitment to celebrating diversity and multiculturalism we recommend that it facilitate a dialogue between the police service and representatives of the Irish communities and other Glasgow residents including the Orange Order to consider whether it might be possible to stage a St Patrick's Day parade in Glasgow itself."
Mary Scanlon MSP, Scottish Conservative and Unionist, who represents the Highlands and Islands, dissented from the report and said it was inflammatory rather than helpful.
"I am a unionist for the UK. We have just come out of the most divisive election ever in the history of my time in Scotland
"I do not want a Scotland divided on the lines of nationalism and unionism, that is not my Scotland."
She objected to labelling the Irish in Scotland as a minority.
"They are an integrated, fully respected and loved members of our community, they are not different, this to me, I am afraid, I think is a little bit divisive."
The Irish Community Centre in Camden, London, has taken steps to widen its base to include other immigrant populations including Poles, according to the BIPA.
It said immigrant centres might help promote good relations with the Irish communities.
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