Israel has been officially accepted as a member of the Organisation for Economic Cooperation and Development (OECD), the forum of the world's most developed economies.
The 31 member nations voted unanimously for Israel's accession in Paris on Monday, and also accepted Estonia and Slovenia.
Israel's Minister of Finance, Prof Yuval Steinitz, said the vote has implications far beyond the economic sphere.
"This has huge diplomatic significance at a time when Israel is under attack and being delegitimised in the international arena."
Throughout the three-year acceptance process, Arab countries and anti-Israel groups lobbied hard against Israel's inclusion. Just one country was needed to oppose Israel's membership, as unanimous approval is required.
In recent weeks, Israeli politicians have accused Palestinian PM Salam Fayyad of trying to torpedo Israel's OECD acceptance and until the last moment there were concerns that Norway, Sweden, Ireland or Switzerland would block Israel's accession.
However, Israel's diplomatic victory was so complete that, several months ago, the OECD even backed down on its demand that data to be provided about Israel should exclude east Jerusalem and Jewish settlements on the West Bank and Golan Heights.
OECD membership recognises Israel's status as a fully developed economy, with GDP per capita expected to break through the $30,000 barrier this year, and average annual growth of 5 per cent in the years preceding the recession. The Israeli economy even recorded growth of 0.7 per cent last year despite the global recession.
Accession to the OECD will bring a major economic boost for Israel, including far greater foreign investment, with most of the world's institutional investors restricted in the amounts they can put into non-OECD countries. Israel will also be charged lower interest rates on foreign loans, will find it easier to raise money and can expect improved ratings from credit agencies.
OECD membership will also result in higher levels of governance, transparency and accountability. The country is now committed to the OECD's more rigorous level of reporting and must provide annual data about a broad range of topics from pollution to poverty, which will be used in annual comparative reports.
A condition of Israel's membership is that it must close the widening gaps between rich and poor and pursue economic policies that improve the situation of the Arab minority and strictly Orthodox sector.
Welcoming Israel, OECD Secretary-General Angel Gurria said, "Israel's scientific and technological policies have produced outstanding outcomes on a world scale."