A spokesperson said: “The display of the flag was spontaneous and unauthorised action by the artist.
“It was not approved by the Royal Ballet and Opera and is not in line with our commitment to political impartiality.”
Palestinian flags are commonly seen at protests held in support of Gaza as the Israel-Gaza war continues.
One cast member standing at the top of the stage is seen in videos of the incident silently displaying a large Palestinian flag, at one point shaking it gently.
While the audience continues to applaud the performance, a man from the stage wings is seen attempting to wrestle the flag away from the cast member but they resist and hold on to it for the remainder of the curtain call.
Two other performers stood alongside the one launching the protest can be seen lurching to their side as the tussle plays out.
Some cast members further forward on the stage appear not to realise what is happening behind them.
Other officials stood in the wings can be seen shouting messages to the protesting cast member, who looks ahead and appears to ignore them.