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Israel withdraws nomination of 'settler' as ambassador to Brazil
Dani Dayan was nominated in August but his role as former chairman of Yesha Council, a committee representing illegal Israeli settlements in the West Bank, caused much controversy with the Brazilian authorities, leading to a seven-month spat between the two states.
Dayan will instead be Consul General in New York, the office of Israel's prime minister announced on Monday.
The advocate for Israeli settlements in the West Bank told Army Radio that there "was no choice" but to do this.
Brasilia had rejected Dayan's nomination as it opposes West Bank settlements, illegal under international law.
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Israel captured the West Bank, east Jerusalem and Gaza Strip, territories Palestinians claim for their future state, in the 1967 Mideast war.
It withdrew from Gaza in 2005, leaving nearly 600,000 Israeli settlers in the West Bank and east Jerusalem.
Agencies contributed to this report.