The United Nations cultural body passed a resolution which called Israel an "occupying power" and referred to Al Aqsa Mosque compound only by its Muslim name.
Israel suspended all cooperation with UNESCO after it referred to the Al Aqsa Mosque site in Jerusalem by its Muslim name, Israeli Education Minister Naftali Bennett announced on Friday.
The United Nations cultural body passed a resolution on Thursday, criticising Israel for restricting Muslim access to the holy site. The resolution referred to Israel as an "occupying power". It repeatedly described the site by its Muslim name and said the compound is sacred to Muslims alone.
The city of Jerusalem, where the site is located, is revered by Christians, Jews and Muslims alike. The Jews refer to it as the Temple Mount and the Western Wall, and the Muslims refer to it as the al Aqsa Mosque compound or Haram al Sharif.
Israel will hold no meetings with UNESCO officials, will not cooperate in international conferences, or extend professional cooperation to the cultural body, according to Bennett's decision.
Israeli Prime Minister Benjamin Netanyahu, on Thursday, said UNESCO's decision was "delusional".
"To declare that Israel has no connection to the Temple Mount and the Western Wall is like saying that China has no connection to the Great Wall of China or that Egypt has no connection to the Pyramids."
The resolution was voted with 24 votes in favour, six against, and 26 abstentions with two countries absent.
France, which is trying to bring the Israeli and Palestinians leaders back to the negotiating table by year's-end, was among the countries voting in favour of the resolution on a previous occasion, a move that caused a diplomatic row with the Israeli government. It abstained from Thursday's vote.
We now have an Israeli government Minister so desperate to distract from actual content of the UNESCO resolution he links it to terrorism— (@GarySpedding) October 14, 2016
Earlier this year, President Francois Hollande said there had been an "unfortunate" amendment to the text on that occasion and that he would be "extremely vigilant" with this year's resolution.
Nabil Abu Rdainah, a spokesman for Palestinian President Mahmoud Abbas welcomed the decision.
"This is an important message to Israel that it must end its occupation and recognise the Palestinian state and Jerusalem as its capital with its sacred Muslim and Christian sites," he said.
The Al Aqsa compound has been a source of religious and political tension for decades between Israel and Palestine, as well as a frequent flashpoint for violence.
Muslims consider Jerusalem as the third holiest site, as al Aqsa Mosque was the first qiblah (direction of prayer) for Muslims.
The old city of Jerusalem is also home to some Christian holy sites such as the Church of the Holy Sepulchre, where Christians believe Jesus Christ was crucified by the Romans.