The resolution also harshly criticizes the government for various construction projects in Jerusalem's Old City and at holy sites in Hebron, and calls for an end to Israel's blockade of Gaza without mentioning attacks from the Hamas-run Strip.
The resolution, which UNESCO brought up for a vote on Israel's Independence Day, was backed by the Palestinian Authority and calls on the Jewish state to reject any sovereignty in the city of Jerusalem.
It said the decision reaffirmed "the centrality of Jerusalem to world heritage as well as the need to confront the dangers posed by the illegal practices of Israel, the occupying power... which threaten the cultural and historical integrity of these invaluable sites".
Israeli Prime Minister, Benjamin Netanyahu, denounced the United Nations body earlier on Tuesday, saying it tried to deny the "historical truth" that no one else considered Jerusalem as holy as the Jewish people.
More than half-a-million Israelis live in Jewish-only settlements across the occupied West Bank, including East Jerusalem, according to the Israeli rights group B'Tselem. Muslims, who refer to the site as the Noble Sanctuary, regard it as their third holiest place, home to al-Aqsa mosque - a flashpoint of the Israeli-Palestinian conflict - and the Dome of the Rock shrine.
The text stresses that "all legislative and administrative measures and actions taken by Israel, the occupying Power, which have altered or purport to alter the character and status of the Holy City of Jerusalem, and in particular the "basic law" on Jerusalem, are null and void and must be rescinded forthwith".
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Dermer said he was looking forward to US Ambassador David Friedman's arrival in Israel, adding it would be "hopefully followed by the arrival of another unnamed senior US official".
Italian Foreign Minister Angelino Alfano said he had instructed the country's representative to UNESCO to vote against "the latest politicized resolution on Jerusalem".
While Israel has long pressed nations to move their embassies to Jerusalem, which both the Israelis and Palestinians claim as their capital, nations have largely resisted taking the step out of fears it could undermine the peace process and lead to violence in the region.
"Our opinion is very clear: UNESCO can't become the headquarters of a permanent ideological clash in which questions are faced for which the solutions are supposed to be handled in other headquarters", Alfano was quoted as saying by the Italian news agency ANSA.
Hizma is a key checkpoint for Palestinians and Israeli settlers crossing into and out of Jerusalem.