The United Nations cultural agency has placed itself at risk of losing funding after it gave the Palestinians full membership.
In a move that was opposed by the United States, UNESCO delegates voted to admit the Palestinians as a full member of the Paris-based agency.
The US said before the vote that holding it would jeopardise peace negotiations and threatened to withhold around $80 million in funding, which counts for about a quarter of UNESCO's budget.
The Palestinian bid required the support of more than two-thirds of UNESCO's 193 members. In the end, 107 countries supported membership.
Britain abstained, while Canada and Germany voted against membership and France, Brazil and India voted for it.
Nimrod Barkan, Israel's ambassador to UNESCO, said UNESCO's decision was a tragedy.
"It deals in science, not science fiction," he said. "They forced on UNESCO a political subject out of its competence."
A spokesman for Israel's Foreign Ministry added: "This is a unilateral Palestinian manoeuver which will bring no change on the ground but further removes the possibility for a peace agreement.
"This decision will not turn the Palestinian Authority into an actual state yet places unnecessary burdens on the route to renewing negotiations."