The UN adopted a Palestinian-drafted resolution that demanded Israel end "its unlawful presence in the Occupied Palestinian Territory" within 12 months.
There were 43 countries that abstained - including Australia, while Israel, the United States and 12 others voted against it.
Foreign Minister Winston Peters said the Israel-Palestine conflict had gone on for far too long.
He said the resolution wasn't perfect and New Zealand had expressed concerns with some of the text, including the 12-month timeframe, which Peters said was unrealistic.
"New Zealand's yes vote is fundamentally a signal of our strong support for international law and the need for a two-state solution."
The action isolates Israel days before world leaders travel to New York for their annual UN gathering. Israeli Prime Minister Benjamin Netanyahu was due to address the 193-member General Assembly on September 26, the same day as Palestinian President Mahmoud Abbas.
The resolution welcomed a July advisory opinion by the International Court of Justice that said Israel's occupation of Palestinian territories and settlements was illegal and should be withdrawn.
The advisory opinion - by the highest United Nations court, also known as the World Court - said this should be done "as rapidly as possible," although the General Assembly resolution imposes a 12-month deadline.
The General Assembly resolution also called on states to "take steps towards ceasing the importation of any products originating in the Israeli settlements, as well as the provision or transfer of arms, munitions and related equipment to Israel ... where there are reasonable grounds to suspect that they may be used in the Occupied Palestinian Territory".
The resolution was the first to be formally put forward by the Palestinian Authority since it gained additional rights and privileges this month including a seat among UN members in the assembly hall and the right to propose draft resolutions.
The war in the Gaza Strip began on October 7, 2023, when Hamas gunmen stormed into Israeli communities, killing around 1200 people and abducting about 250 hostages, according to Israeli tallies.
Since then, Israel's military has levelled swathes of the Palestinian enclave, driving nearly all of its 2.3 million people from their homes, giving rise to deadly hunger and disease and killing more than 41,000 people, according to Palestinian health authorities.
The Palestinian Authority represents the Palestinian people at the UN, where it is a non-member observer state and the delegation is known as the State of Palestine.
- Reuters/RNZ
