The United Nations Security Council last week demanded an end to Israeli settlements in the first such resolution in decades.
Israel labelled the resolution "shameful" but HRW said it increases pressure on world football's governing body FIFA ahead of a meeting of its leadership next month.
Six football clubs are based in settlements in the West Bank but play in the Israeli leagues, in what rights groups argue is a violation of international law.
"The UN resolution makes it much more difficult for FIFA to pretend that allowing Israel to hold games in the settlements is neutral or acceptable," Sari Bashi, HRW's Israel advocacy director, told AFP.
"The resolution clearly says that the settlements have no validity," she added, meaning states and bodies like FIFA "should distinguish between Israel and the occupied territory."
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More than 400,000 Israelis now live inside the West Bank, in settlements largely closed off to Palestinians and seen by the international community as a major obstacle to peace.
FIFA had been due to rule on the future of the six clubs in October but instead delayed its decision until the next meeting, due to take place January 9-10.
Both the Israeli and Palestinian football associations are members of FIFA and the body's governing rules prevent matches being played on another association's territory without permission.
Bashi pointed out that FIFA officials had previously referred to the West Bank as "disputed" but said the Security Council resolution clearly calls the region occupied.
"This resolution makes it harder for FIFA to continue pretending it is avoiding politics by allowing the settlement clubs to continue playing."
The Israel Football Association has accused the Palestinians of dragging sport "from the football field into a political one".