Houllier said: "UEFA are a neutral body and I think they viewed the incident with proper perspective. They took into account the mitigation and also the provocation on the night.
"This club did not approve of, or condone, his reaction but it came about because of provocation. I am pleased UEFA looked at it in a neutral way without taking the hype over the incident into account.
"We acted quickly and firmly after it happened and I don't believe the good relationships between the two clubs has been harmed. Certainly the letters we have had from Celtic and from the head of their supporters club tells us that. I don't think this incident will cast a shadow over the two clubs."
The two game ban will start with tomorrow's UEFA Cup decider with Celtic. Houllier knows the Reds will miss Diouf, but he is sure his replacement can take the chance to impress.
"El Hadji has been playing pretty well lately. He is settling well into the team, working hard and creating chances for his team mates. We will miss him but it will give an opportunity for someone else to come in."