Israeli foreign ministry says the decision was taken because of HRW's 'extreme, hostile anti-Israel agenda.'
Israel has refused a work permit to Human Rights Watch (HRW) employee, accusing the group of serving as Palestinian propagandists.
Foreign Ministry spokesman Emmanuel Nahshon said the decision was taken because of HRW's "extreme, hostile anti-Israel agenda which was working at the service of Palestinian propaganda...in a totally biased manner."
The organisation has been granted unimpeded access to Israel and the West Bank for three decades. Israel has now joined Cuba, Egypt, North Korea, Sudan, the United Arab Emirates, Uzbekistan, and Venezuela as countries that have impeded its access, HRW said.
HRW said it was "disappointing that the Israeli government seems unable or unwilling to distinguish between justified criticisms of its actions and hostile political propaganda".
The US State Department said it strongly disagreed with Israel's characterisation of HRW, which it considers a credible human rights organisation.
"Even though we do not agree with all of their assertions or conclusions, given the seriousness of their efforts, we support the importance of the work they do. We reference HRW reports in our own reporting," acting State Department spokesman Mark Toner said.
Elor Azaria verdict
The move came after Israel faced criticism from the UN Human Rights Council in Geneva over the 18-month jail sentence handed to an Israeli soldier Elor Azaria.
The council called it an "apparent extrajudicial execution of an unarmed man".
The UN Human Rights spokeswoman Ravina Shamdasani said the sentence given to soldier Elor Azaria was "excessively lenient" and part of a "chronic culture of impunity" for Israeli abuse of Palestinians.
Elor Azaria shot an incapacitated and lying wounded Palestinian assailant, Abdel Fattah al-Sharif, in the head.
The 20-year-old was serving as an army medic when he shot the Palestinian man in last year's March.
The soldier was sentenced to 18 months imprisonment on February 21.
NGOs in Israel
Israeli foreign ministry spokesman Nahshon said the decision was a one-off and did not represent a change in policy towards NGOs.
The HRW representative could enter Israel on a tourist visa and the work visa application may be reconsidered if an appeal is lodged.
Last year, a new law limited foreign funding for NGOs which Israel considers critical of its policies. The law was heavily criticised by the European Union.
Many of the Israeli NGOs that receive support from foreign governments oppose the policies of Prime Minister Benjamin Netanyahu's right-wing government towards the Palestinians.