UN Under-Secretary General and ESCWA Executive Secretary Rima Khalaf said she was leaving after "powerful member states" had pressured the world body and its chief with "vicious attacks and threats".
It described the report as an objective investigation away from political biases, saying that the proceedings and the data were professionally documented and showed that Israel was imposing "racist separation" on the Palestinian people. "Trying to scrap the report will not scrap the reality it describes", he added.
"Anti-Israel activists do not belong in the UN", Danon said in a statement.
Reading out her resignation letter at a press conference in Beirut, Khalaf said: "I do not find it surprising that such member states, who now have governments with little regard for worldwide norms and values of human rights, will resort to intimidation when they find it hard to defend their unlawful policies and practices".
United Nations spokesman Stephane Dujarric said on Wednesday the report was published without prior consultation with the United Nations secretariat.
ESCWA, which comprises 18 Arab states, published the report on Wednesday and said it was the first time a United Nations body had clearly charged that Israel "has established an apartheid regime that dominates the Palestinian people as a whole". Asked whether Guterres succumbed to pressure from the Trump administration, Dujarric said: "This is not about pressure".
United States envoy to the UN Nikki Haley, who had demanded the report's withdrawal last week, said in a statement: "When someone issues a false and defamatory report in the name of the U.S., it is appropriate that the person resign".
Al Jazeera's Imtiaz Tyab said, however, it was "highly unlikely" that United Nations leadership was unaware of the report's existence or its content prior to its publication.
Abbas said Palestinians appreciated Khalaf's humanitarian and national stances as she refused to cover up crimes committed by the Israeli occupying authority against the Palestinian people.
At least one additional report commissioned by ESCWA, attempting to create an "innovative" and "scientific" methodology for estimated the cost of Israel's 50-year control of the territories, is still in the works, with the aim of demanding billions in reparations for Palestinians.