He spoke after 14 people died in a shooting spree in California by two Muslims whom the FBI said had been radicalised.
His comments prompted more than half a million Britons to sign a petition calling for him to be barred from entering the country, where he has business interests.
MPs from all sides criticised Trump's comments during the three-hour debate.
While it was not followed by a vote, many more MPs spoke against a ban than for it.
"I want to see Donald Trump come to this country ... I want him to get a sense of the fury and the frustration with his xenophobic remarks," said Gavin Robinson, an MP from Northern Ireland's Democratic Unionist Party.
Only interior minister Theresa May can issue an order banning entry into Britain, and Prime Minister David Cameron has said that while Trump's comments were "divisive, unhelpful and wrong", he does not back the idea of barring him.
Immigration Minister James Brokenshire said the government did not comment on who it was considering for exclusion but said "a frank and open exchange of views" was the most effective way to influence Trump.
"It is in the UK's interests that we engage all presidential candidates, Democratic and Republican, even though we may disagree profoundly on important issues," he said.
Some spoke passionately in favour of banning Trump, however, saying he should not be treated differently from others who have been banned for similar views.
"Just think what would happen in the current climate if he came ... and preached that message of divisive hate," said Jack Dromey, an opposition Labour Party spokesman on home affairs.
Trump has threatened to cancel more than £700 million (A$1.45 billion) of planned investments in golf courses in Scotland if he is banned.
