Israeli Prime Minister Benjamin Netanyahu warned Foreign Minister Murray McCully of a "declaration of war" if the UN Security Council passed a resolution condemning Israel's continued settlements, according to a report.

New Zealand co-sponsored the resolution, which said the settlements violate international law and undermine a two-state solution in Israel's conflict with Palestine.

On Saturday, the Security Council voted in favour of passing the resolution and the Israeli Government recalled its ambassador from New Zealand as a result.

Before the vote on Saturday, Netanyahu personally phoned McCully and warned him of war, unnamed Western diplomats told Isareli newspaper Haaretz.

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"This is a scandalous decision. I'm asking that you not support it and not promote it," Netanyahu reportedly told McCully.

"If you continue to promote this resolution from our point of view it will be a declaration of war. It will rupture the relations and there will be consequences."

McCully reportedly refused to back down, telling Netanyahu: "This resolution conforms to our policy and we will move it forward."

A spokesman for McCully confirmed the phone call took place, but said the Foreign Minister wouldn't comment on what was discussed.

The resolution demanded that "Israel immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem."

New Zealand was the only western nation to co-sponsor the resolution, joining Malaysia, Senegal, and Venezuela.

The Security Council passed the resolution 13-0. The United States abstained.

McCully previously told the Herald he hoped "the friendship" between Israel and New Zealand would continue, in spite of the resolution.

Asked if the resolution was a victory, McCully said: "It is a victory for those who are keen to see the Security Council take action on the Middle East peace process after eight years of complete inaction."

The Ministry of Foreign Affairs and Trade yesterday confirmed New Zealand's ambassador was "not able to visit Israel for the time being".

"We have been very open about our view that the UNSC should be doing more to support the Middle East Peace Process and we look forward to continuing to engage constructively with all parties on this issue."

Kiwi diplomat Jonathan Curr is also ambassador to Turkey, Azerbaijan, Georgia, and Jordan.

Israeli Prime Minister Benjamin Netanyahu has also recalled Israel's ambassadors from Senegal, ended aid programmes to Senegal and pledged to cut off US$7.9 million ($11.46m) in Israeli funding to UN institutions.

Netanyahu defended his reaction to the vote, saying "there's no alternative to a firm response".

He added: "We don't turn the other cheek. Countries of the world respect strong countries that stand up for themselves."