By a vote of 24 states in favour, nine against, with 14 abstentions, the 47-member forum adopts resolution brought by Organisation of Islamic Cooperation and the Palestinian delegation to UN.
The UN Human Rights Council has decided to create an open-ended international investigation into violations and "crimes" surrounding the latest Israeli violence in besieged Gaza, and also into "systematic" abuses in occupied West Bank and inside Israel.
Thursday's resolution, which passed with 24 of the council's 47 members in favour, nine opposed and 14 abstaining, will spur an unprecedented level of scrutiny on abuses and their "root causes" in the decades-long Middle East conflict.
The resolution was brought by Organisation of Islamic Cooperation and the Palestinian delegation to UN.
"The draft resolution ... is therefore adopted," Nazhat Shameem Khan, Fiji's ambassador who serves as current president of the Geneva forum, said after an all-day special session.
Israel's Foreign Ministry rejected the resolution and said it will not cooperate with the investigation.
Before the vote Meirav Eilon Shahar, Israel's ambassador to the UN in Geneva, slammed the session and the text, insisting they were yet another example of the council's bias against Israel.
US said it "deeply regrets" UNHRC decision, saying "it threatens to imperil recent progress in region".
Gaza's governors Hamas welcomed the UNHRC resolution, and called its action against Israel over bombardment of Gaza an "legitimate resistance".
Gaza-based journalist Nizar Sadawi said Palestinians in blockaded enclave are not hopeful that a change can happen on the ground.
But TRT World's editor-at-large Ahmet Alioglu said it's the first time the UNHRC created a permanent fact-finding mechanism with respect to any UN member that also calls for an embargo on arms sale to Israel.
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'Stain on our humanity'
Earlier, addressing a special session of the Council, UN rights chief Michelle Bachelet voiced deep concern about the "high level of civilian fatalities and injuries" from the attacks on blockaded Gaza.
"If found to be indiscriminate and disproportionate in their impact on civilians and civilian objects, such attacks may constitute war crimes," she warned.
Also addressing the Council, Special Rapporteur on Palestinian territories, Michael Lynk, "repeated his call for the latest escalation to be investigated by the International Criminal Court," UN News reported.
"When intensive violence revisits the Palestinians in Gaza, as it regularly does, there is no escape. That this medieval restriction on basic freedoms has gone on for 14 years, and counting, is a harrowing stain on our humanity," said Lynk.
He described Gaza as "the world’s largest open-air prison" that is a "tiny sliver of land, holding more than two million people under occupation, cut off from the outside world by a comprehensive and illegal air, sea and land blockade."
An array of countries have denounced the latest Israeli violence and urged efforts to address the roots of the Mideast conflict.
Bachelet said her office had "not seen evidence" that the buildings targeted in Gaza, including medical facilities and media offices, were "hosting armed groups or being used for military purposes".
Palestinian Foreign Minister Riyad al Maliki meanwhile accused Israel of instituting "an apartheid system."
He sought to highlight years of suffering by Palestinians in the lands controlled or occupied by Israel.
"The Israeli war machinery and terrorism of its settlers continue to target our children who face murder, arrest and displacement, deprived of a future in which they can live in peace and security," Maliki said.
'Crimes against humanity'
Turkish Foreign Minister Mevlut Cavusoglu at UNHCR session called Israel's provocations in Palestine "part of a systematic campaign of ethnic, religious, cultural cleansing," urging for use of effective instruments to end Israel’s impunity
"Israel's attacks on Palestinian civilians constitute crimes against humanity and has no justifiable reason," said Cavusoglu.
Bachelet said her office had verified the deaths of 270 Palestinians in blockaded Gaza, the occupied West Bank and occupied East Jerusalem, including 68 children, during violence this month. Most were killed in Hamas-governed Gaza, where Israel bombarded for 11 days. The conflict ended with a ceasefire.
Gaza's rockets killed 10 Israelis and residents.