The culture minister, Muslim MPs and other Muslim organisations have condemned the Islamic Council of Norway's move.
It comes after the government gave the group 484,000 kroner ($55,000; £44,000) to improve interfaith dialogue.
Norway's parliament has already supported banning the niqab in schools.
A vote on the issue in last year had cross-party support and the ban is likely to be enforced later this year.
Several European countries have banned the niqab in public places.