Australia has broken ranks with the United States and New Zealand over Israel, indicating that it would most likely have opposed the UN Security Council resolution condemning Israeli settlements in the West Bank and East Jerusalem.

Israel recalled its ambassador to New Zealand for consultations after NZ co-sponsored the resolution demanding that Israel "immediately and completely cease all settlement activities in the occupied Palestinian territory, including East Jerusalem", and saying the settlements had "no legal validity and [constitute] a flagrant violation under international law".

Israeli Prime Minister Benjamin Netanyahu phoned New Zealand's Foreign Minister, Murray McCully, to warn him the resolution was a "declaration of war", according to a leading Israeli newspaper.

After the resolution, Israel's government said it would move ahead with thousands of new homes in East Jerusalem and said it had received "ironclad" information that Washington had helped craft the resolution.