The Israeli Government has recalled its ambassador from New Zealand after the UN Security Council passed a resolution condemning Israel's continued settlements.
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.
The resolution was passed 14-0 at the last council meeting of the year, and New Zealand's last meeting in its two-year term as an elected member of the Security Council.
Loud applause was heard in the packed chamber when the US ambassador, Samantha Power, abstained.
All remaining members of the security council, including Egypt, which had drafted the resolution and had been briefly persuaded by Israel to postpone the vote, voted in support.
Malaysia, Senegal and Venzuela also sponsored the resolution but only New Zealand and Senegal face reprisals because they have diplomatic relations with Israel.
Egypt was pressured by US President-elect Donald Trump and Israel to delay the resolution. It eventually dropped it but the co-sponsors ploughed ahead with it.
Donald Trump, who takes over as US President on January 20, tweeted yesterday that the outgoing Obama Administration should veto the resolution - but it abstained, allowing it to pass.
Foreign Minister Murray McCully told the Herald Israeli Prime Minister Benjamin Netanyahu told him before the vote ambassador Itzhak Gerberg would be recalled if the resolution passed.
McCully said he had been informed the ambassador had been recalled "for consultations".
"It underscores the fact that Israel is strongly opposed to the council position on the issue. That is not a great surprise to us.
"But we hope that the friendship that has existed between the two countries will be able to endure regardless of different view on this issue."
Asked if it was a victory, McCully said: "It is a victory for those who are keen to see the Security Council take some action on the Middle East peace process after eight years of complete inaction."
It was certainly a step by the council to protect space for the two-state solution the Secretary General had been telling the council for months was being undermined by events on the ground.
Asked if the resolution would affect the settlement process, McCully said it was a question for the Israeli Government to answer.
"We hope that the parties, all of them, now will reflect on the position and try and find a more constructive pathway forward."
He said would not use the term "toothless" to describe the resolution, but said it was "symbolic."
"A good deal of what the UN does is symbolic. It can't make countries do things. You can try and set some benchmarks in terms of international opinion and I think what the council has done here is reassert the international community's commitment to the two-state solution as being the basis for a durable peace in the Middle East.
The US decision to abstain was immediately condemned by Netanyahu's office as "shameful", which pointedly referred to Israel's expectation of working more closely with Trump.
Following the vote Trump, tweeted: "As to the UN, things will be different after Jan 20."
The United Nations maintains that settlements are illegal, but UN officials have reported a surge in construction over the past months.
About 430,000 Israeli settlers live in the West Bank and a further 200,000 Israelis live in east Jerusalem, which Palestinians see as the capital of their future state.
McCully said he hoped the issue would not set off New Zealand's relations with the Trump Administration on a bad footing.
"We respect the US process by which they determine their own foreign policy and we expect reciprocity from them."
McCully discussed a possible Security Council resolution with the outgoing US Secretary of State, John Kerry, during his visit to New Zealand last month.
McCully then travelled to the Middle East to discuss it with others, including Netanyahu.
Netanyahu led Israel's response to today's resolution saying: "Israel rejects this shameful anti-Israel resolution at the UN and will not abide by its terms.
"At a time when the Security Council does nothing to stop the slaughter of half a million people in Syria, it disgracefully gangs up on the one true democracy in the Middle East, Israel, and calls the Western Wall 'occupied territory'.
"The Obama Administration not only failed to protect Israel against this gang-up at the UN, it colluded with it behind the scenes.
"Israel looks forward to working with President-elect Trump and with all our friends in Congress - Republicans and Democrats alike - to negate the harmful effects of this absurd resolution."
Diplomatic relations between New Zealand and Israel broke down during the Helen Clark Government after two Israelis, thought to be Mossad agents, were accused of passport fraud.
New Zealand received an apology from Israeli Foreign Minister Silvan Shalom and Israel eventually set up an embassy in Wellington.
The John Key Government also had its difficulties when Israel refused to allow New Zealand's ambassador to Israel, Jonathan Curr, to present his credentials because he was simultaneously accredited to the Palestinian Authority.
The New Zealand Government got around it by appointing Sir Jim McClay, a special envoy of Key and a more senior diplomat, to be New Zealand's representative to the Palestinian Authority, although New Zealand-based.
McCully said New Zealand had no plans to withdraw Curr.
The statement said Netanyahu ordered a series of diplomatic steps against the countries who co-sponsored "the anti-Israeli resolution in the Security Council and with whom Israel has diplomatic relations".
The steps were:
•Instructed Israel's ambassadors in New Zealand and Senegal to immediately return to Israel for consultations.
•Ordered the cancellation of the planned visit to Israel of the Senegalese Foreign Minister in three weeks.
•Instructed the Foreign Ministry to cancel all aid programmes to Senegal.
•Ordered the cancellation of visits in Israel of the non-resident ambassadors of Senegal and New Zealand.
The New Zealand Jewish Council has called on the Governments of New Zealand and Israel to work together to keep the Israeli embassy in Wellington open.
Spokeswoman Juliet Moses said the embassy played a vital role in Jewish life in New Zealand, supporting Jewish festivals and cultural acitivities and facilitating business links.