The council adopted the resolution last month after the United States refrained from using a veto to block the measure in a break from its usual practice of shielding its Middle East ally.
The cut to Israel's $40 million annual contribution to the United Nations represented the portion of the UN budget allocated to four committees on Palestinian issues, the Israeli mission said.
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"It is unreasonable for Israel to fund bodies that operate against us at the UN," Israeli Ambassador Danny Danon said in a statement.
"We seek to stop the practice where the UN is used solely as a forum for unending attacks against Israel."
The announcement came a day after the US House of Representatives overwhelmingly voted in favor of a measure condemning the UN stance and chastising President Barack Obama's administration for abstaining in the Security Council vote.
The cut in funding is the first in a series of retaliatory measures that the Israeli mission said would be taken at the United Nations after the new US administration takes office.