The resolution received 124 votes in favour while 43 countries - including Australia - abstained and Israel, the United States and 12 others voted no.
The action isolates Israel days before world leaders travel to New York for their annual UN gathering.
Israeli Prime Minister Benjamin Netanyahu is due to address the 193-member General Assembly on September 26, the same day as Palestinian President Mahmoud Abbas.
— UN News (@UN_News_Centre) #BREAKINGUN General Assembly ADOPTS resolution demanding that Israel "brings to an end without delay its unlawful presence" in the Occupied Palestinian Territory, and do so within 12 monthsVoting resultIn favor: 124Against: 14Abstain: 43 pic.twitter.com/hIwn7y6EY4September 18, 2024
The resolution welcomes a July advisory opinion by the International Court of Justice that said Israel's occupation of Palestinian territories and settlements is illegal and should be withdrawn.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 calls 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 is 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.
A Palestinian resolution was backed by 124 delegates while 43 countries abstained and 13 voted no. (AP PHOTO)
US ambassador to the UN Linda Thomas-Greenfield urged countries to vote no on Wednesday.
The United States - an arms supplier to and ally of Israel - has long opposed unilateral measures that undermine the prospect of a two-state solution.
The ICJ advisory opinion is not binding but carries weight under international law and may weaken support for Israel.
A General Assembly resolution also is not binding but carries political weight.
There is no veto power in the assembly.
"Each country has a vote, and the world is watching us," Palestinian UN ambassador Riyad Mansour told the General Assembly on Tuesday.
"Please stand on the right side of history. With international law. With freedom. With peace."
Israel's UN ambassador Danny Danon criticised the General Assembly on Tuesday for failing to condemn the October 7 attack on Israel by Palestinian Hamas militants that sparked Israel's assault on the Hamas-run Gaza Strip.
He rejected the Palestinian text, saying: "Let's call this for what it is: this resolution is diplomatic terrorism, using the tools of diplomacy not to build bridges but to destroy them".
Israel captured the West Bank, Gaza Strip and East Jerusalem - areas of historic Palestine which the Palestinians want for a state - in the 1967 Middle East war and has since built settlements in the West Bank and steadily expanded them.
The war in the Gaza Strip began on October 7, 2023 when Hamas gunmen stormed into Israeli communities, killing about 1200 people and abducting about 250 hostages, according to Israeli tallies.
Since then, Israel's military has levelled swaths 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 General Assembly on October 27 last year called for an immediate humanitarian truce in Gaza with 120 votes in favour.
Then in December, 153 countries voted to demand - instead of calling for - an immediate humanitarian ceasefire in December.
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.
