Israel has withdrawn the nomination of a settler leader as ambassador to Brazil, ending a seven-month standoff with Brasilia that refused to accept his credentials.

The office of Israel's Prime Minister says Dani Dayan will be Consul General in New York, instead of the posting to Brazil.

Dayan, a former chairman of a West Bank settler council, was nominated in August as ambassador to Brazil, which opposes West Bank settlements and delayed accrediting Dayan.

Dayan told Army Radio on Monday that there "was no choice" but to do this.

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. Nearly 600,000 Israelis live in the West Bank and east Jerusalem.