Poland's president has decided to sign a bill that would set limits on the ability of Jews to recover property seized by Nazi German occupiers and retained by postwar communist rulers.
The move drew anger from Israel, which said the law was anti-Semitic.
“I made a decision today on the Act, which in recent months was the subject of a lively and loud debate at home and abroad,” President Andrzej Duda said on Saturday.
“After an in-depth analysis, I have decided to sign the amendment.”
Before the Second World War, Poland was home to one of the world's largest Jewish communities, but it was almost entirely wiped out by the Nazis and Jewish former property owners and their descendants have been campaigning for compensation.
Until now, Jewish people living abroad or their descendants could make a claim that a property had been seized illegally and demand its return, but Polish officials said this was causing uncertainty over property ownership.
In 2015, Poland's Constitutional Tribunal ruled there should be specific deadlines after which administrative decisions over property titles could no longer be challenged. Changes to the law were adopted by the Polish parliament earlier this week.
The bill sets a 30-year limit for restitution claims.
The issue of Jewish property rights in Poland is further complicated because, unlike other EU states, it has not created a fund to give compensation to people whose property was seized.
Israeli Prime Minister Naftali Bennett condemned the law and said Israel would not simply stand by after its approval.
“It is a shameful decision and a disgraceful contempt for the memory of the Holocaust,” he said.
Israel's Foreign Minister Yair Lapid said the move was immoral.
“Poland today, for the first time, approved an anti-Semitic and immoral law," he said.
In response, the head of Israel's embassy in Warsaw has been recalled immediately, he said.
“Poland has tonight become an anti-democratic, non-liberal country that does not honour the greatest tragedy in human history,” Mr Lapid said.
Israel will not send a new ambassador to Warsaw at this stage, Mr Lapid said.
He also suggested Poland's ambassador to Israel extend his holiday and not return to the country.
“He should use the time he has on his hands to explain to the Poles what the Holocaust means to Israel's citizens and the extent to which we will not tolerate contempt for the memory of those who perished and for the memory of the Holocaust. It will not stop here,” Mr Lapid said.
Israel is discussing further steps with the US, he said.
The Polish Foreign Ministry said it disapproved of the Israeli Foreign Ministry's actions.
It said the government would take "appropriate political and diplomatic actions, bearing in mind the principle of symmetry in bilateral relations".
“The steps taken by Israel are seriously damaging our relationship,” the ministry said.
US Secretary of State Antony Blinken said Washington was deeply concerned that the Polish parliament had passed the bill, and urged Mr Duda not to sign it into law.
Washington is one of Warsaw's most important allies, but relations between them have been strained by the property issue, as well as issues such as plans to introduce changes that the opposition says aim to silence a US-owned news channel critical of the government.
