The UN Security Council has demanded that Israel halt settlements in Palestinian territory, after the United States refrained from vetoing a resolution condemning its closest Middle East ally.
In a rare and momentous step, the United States instead abstained, enabling the adoption of the first UN resolution since 1979 to condemn Israel over its settlement policy.
Applause broke out in the chamber after the text was passed with support from all remaining members of the 15-member council.
The landmark move by the Security Council on Friday came despite an effort led by Israel and backed by US President-elect Donald Trump to block the text.
Trump reacted after the vote in a tweet, vowing: "As to the UN, things will be different after Jan 20th."
Ambassador Samantha Power said the US abstention stemmed from concerns that the expansion of the Jewish outposts was threatening the two-state solution aimed at achieving peace by creating a Palestinian state alongside Israel.
"We do not believe that outside parties can impose a solution that has not been negotiated by the two parties, nor can we unilaterally recognize a future Palestinian state," said Power.
"But it is precisely our commitment to Israel's security that makes the United States believe that we cannot stand in the way of this resolution as we seek to preserve a chance of attaining our longstanding objective of two states living side by side in peace and security," she said.
"The settlement problem has gotten so much worse that it is now putting at risk the very viability of that two-state solution," said Power.
Israeli settlements are seen as a major stumbling block to peace efforts, as they are built on land the Palestinians see as part of their future state.
Palestinian President Mahmud Abbas's office said the vote was "a big blow" to Israeli policy and a show of "strong support for the two-state solution."
The United Nations maintains that settlements are illegal, but UN officials have reported a surge in construction over the past months.
Some 430,000 Israeli settlers currently live in the West Bank and a further 200,000 Israelis live in east Jerusalem, which the Palestinians see as the capital of their future state.
The resolution demands that "Israel immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem."
It states that Israeli settlements have "no legal validity" and are "dangerously imperiling the viability of the two-state solution."
Israeli Ambassador Danny Danon criticized the administration of President Barack Obama for not vetoing "this disgraceful resolution."
"I have no doubt that the new US administration and the incoming UN secretary general will usher in a new era in terms of the UN's relationship with Israel," said Danon.