The visitors were given a dream start when star striker Eran Zahavi put them ahead in the 34th minute, with his tenth goal of the qualifying campaign. He latched on to an inch-perfect through ball from Munas Dabbur before beating one defender and unleashing a dipping shot into the top corner from 25 yards.
However, Andi Herzog's men were pegged back on the stroke of half-time when Valentino Lazaro hauled Austria level following a pass from Marco Arnautovic.
Austria forged ahead after 56 minutes through Martin Hinteregger, who nipped in between two defenders and thumped a shot past Ofir Marciano.
The home side secured victory two minutes from full-time via a deflected effort from Marcel Sabitzer to lift Austria into second place in Group G.
Israel return to action on Tuesday when they host basement battlers Latvia. Their campaign ends with a home match against group leaders Poland on November 16 followed by a match in North Macedonia three days later.
ISRAEL: Marciano, Dasa, Bitton, Tawatha (sub: Ben Harush), Taha (sub: Cohen 76), Tibi, Elhamed, Natcho, Zahavi, Dabbur (sub: Weissman 70), Solomon
Bookings: Bitton, Dabbur
Goal: Zahavi
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GROUP G STANDINGS
1. Poland Pl. 7, W. 5, Pts. 16
2. Austria Pl. 7, W. 4, Pts. 13
3. North Macedonia Pl. 7, W. 3, Pts. 11
4. Slovenia Pl. 7, W. 3, Pts. 11
5. Israel Pl. 7, W. 2, Pts. 8
6. Latvia Pl. 7, W. 0, Pts. 0
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MATCH STATS
SHOTS: Austria 15, Israel 10
On target: Austria 7, Israel 5
Off target: Austria 6 (2 blocked), Israel 4 (1 blocked)
CORNERS: Austria 6, Israel 5
OFFSIDE: Austria 3, Israel 1
CARDS: Austria 2 yellows, Israel 2 yellows
POSSESSION: Austria 50%, Israel 50%
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