The United Nations’ top legal power, the International Court of Justice, has ruled that Israel's presence in the Palestinian occupied territories is "unlawful" and called on it to end.
Justices ruled on Friday that the building and expansion of Israeli settlements in the West Bank and east Jerusalem were discriminatory against Palestinians.
It also ruled against the annexation and imposition of permanent control over lands and discriminatory policies.
The International Court of Justice was issued a non-binding opinion on the legality of Israel's 57-year occupation of lands sought for a Palestinian state.
The ruling, however, is likely to have more effect on international opinion than it will on Israeli policies.
The court's panel of 15 judges from around the world said Israel has abused its status as the occupying power in the West Bank and east Jerusalem by carrying out policies of annexing territory, imposing permanent control and building settlements.
It said Israel must end settlement construction immediately.
It said such acts render "Israel's presence in the occupied Palestinian territory unlawful". It says Israel’s continued presence was "illegal" and should be ended as "rapidly as possible".
Israel, which normally considers the United Nations and international tribunals as unfair and biassed, did not send a legal team to the hearings.
Israel submitted written comments, saying that the questions put to the court are prejudiced and fail to address Israeli security concerns.
Israeli officials have said the court's intervention could undermine the peace process, which has been stagnant for more than a decade.
The court also found that Israel's use of natural resources was "inconsistent" with its obligations under international law as an occupying power.
Friday's ruling comes against the backdrop of Israel's devastating 10-month military assault on Gaza, which was triggered by the Hamas-led attacks in southern Israel.
In a separate case, the International Court of Justice is considering a South African claim that Israel's campaign in Gaza amounts to genocide, a claim that Israel vehemently denies.
Israel captured the West Bank, east Jerusalem and Gaza Strip in the 1967 Mideast war. The Palestinians seek all three areas for an independent state.
Erwin van Veen, a senior research fellow at the Clingendael think tank in The Hague, said that if the court rules that Israel's policies in the West Bank and east Jerusalem breach international law, that is unlikely to change Israeli policies but it would "isolate Israel further internationally, at least from a legal point of view”.