It found some teachers are reluctant to cover the atrocity for fear of upsetting students whose beliefs include Holocaust denial.
There is also resistance to tackling the 11th century Crusades - where Christians fought Muslim armies for control of Jerusalem - because lessons often contradict what is taught in local mosques.
The findings have prompted claims that some schools are using history 'as a vehicle for promoting political correctness'.
The study, funded by the Department for Education and Skills, looked into 'emotive and controversial' history teaching in primary and secondary schools.
It found some teachers are dropping courses covering the Holocaust at the earliest opportunity over fears Muslim pupils might express anti-Semitic and anti-Israel reactions in class.
The researchers gave the example of a secondary school in an unnamed northern city, which dropped the Holocaust as a subject for GCSE coursework.
The report said teachers feared confronting 'anti-Semitic sentiment and Holocaust denial among some Muslim pupils'.
It added: "In another department, the Holocaust was taught despite anti-Semitic sentiment among some pupils.
"But the same department deliberately avoided teaching the Crusades at Key Stage 3 (11- to 14-year-olds) because their balanced treatment of the topic would have challenged what was taught in some local mosques."
A third school found itself 'strongly challenged by some Christian parents for their treatment of the Arab-Israeli conflict-and the history of the state of Israel that did not accord with the teachings of their denomination'.
The report concluded: "In particular settings, teachers of history are unwilling to challenge highly contentious or charged versions of history in which pupils are steeped at home, in their community or in a place of worship."
But Chris McGovern, history education adviser to the former Tory government, said: "History is not a vehicle for promoting political correctness. Children must have access to knowledge of these controversial subjects, whether palatable or unpalatable."
The researchers also warned that a lack of subject knowledge among teachers - particularly at primary level - was leading to history being taught in a 'shallow way leading to routine and superficial learning'.
Lessons in difficult topics were too often 'bland, simplistic and unproblematic' and bored pupils."
This is what happens when people have their views misguided by religion. The job of a balanced education is to present evidence and teach people how to form conclusions fom it. The Holocaust is unique not only in the magnitude of it atrocity, but the magnitude of evidence that we have showing what happened. Everybody who studies this period of world history needs to be presented with the evidence, without it i's impossible to fully understand some of the major conflicts in the present day.
Personally I would like the events of the Crusades to be discussed more often. There can only be one true version of events, and the process of deducing this sequence from the evidence is a worthwhile study for any school child.
If history disagrees with religion, one of them is wrong.
