Israel's Foreign Ministry spokesman likened the report, which was published by the UN Economic and Social Commission for Western Asia (ESCWA), to Der Sturmer - a Nazi propaganda publication that was strongly anti-Semitic.
The report concluded "Israel has established an apartheid regime that dominates the Palestinian people as a whole." The accusation - often directed at Israel by its critics - is fiercely rejected by Israel.
UN Under-Secretary General and ESCWA Executive Secretary Rima Khalaf said the report was the "first of its type" from a UN body that "clearly and frankly concludes that Israel is a racist state that has established an apartheid system that persecutes the Palestinian people".
ESCWA comprises 18 Arab states in Western Asia and aims to support economic and social development in member states, according to its website. The report was prepared at the request of member states, Khalaf said.
UN spokesman Stephane Dujarric told reporters in New York that the report was published without any prior consultation with the U.N. secretariat.
"The report as it stands does not reflect the views of the secretary-general (Antonio Guterres)," said Dujarric, adding that the report itself notes that it reflects the views of the authors.
The United States, an ally of Israel, said it was outraged by the report.
"The United Nations secretariat was right to distance itself from this report, but it must go further and withdraw the report altogether," the US ambassador to the United Nations, Nikki Haley, said in a statement.
The Israeli ministry spokesman, Emmanuel Nahshon, commenting on Twitter, also noted the report had not been endorsed by the UN secretary-general.
"The attempt to smear and falsely label the only true democracy in the Middle East by creating a false analogy is despicable and constitutes a blatant lie," Israel's UN Ambassador Danny Danon said in a statement.
The report said it had established on the "basis of scholarly inquiry and overwhelming evidence, that Israel is guilty of the crime of apartheid."
"However, only a ruling by an international tribunal in that sense would make such an assessment truly authoritative," it added.
The report said the "strategic fragmentation of the Palestinian people" was the main method through which Israel imposes apartheid, with Palestinians divided into four groups oppressed through "distinct laws, policies and practices."
It identified the four sets of Palestinians as: Palestinian citizens of Israel; Palestinians in East Jerusalem; Palestinians in the West Bank and Gaza Strip; and Palestinians living as refugees or in exile.
ESCWA hoped the report would inform further deliberations on the root causes of the problem in the United Nations, among member states, and in society, Khalaf said at an event to launch the report at ESCWA's Beirut headquarters.
It was authored by Richard Falk, a former UN human rights investigator for the Palestinian territories, and Virginia Tilley, professor of political science at Southern Illinois University.
Before leaving his post as UN special rapporteur on human rights in the Palestinian territories in 2014, Falk said Israeli policies bore unacceptable characteristics of colonialism, apartheid and ethnic cleansing.
The United States accused him of being biased against Israel.
