In a statement, Anti-Defamation League national director and CEO Jonathan Greenblatt said that "the blacklist will only serve as ammunition for the BDS movement's anti-Israel campaign, and do nothing to promote constructive initiatives for reconciliation and peace between Israelis and Palestinians".
The report noted that the publication of the list of these companies does not represent a judicial process, and any further steps regarding its mandate will be discussed among the member states of the Human Rights Council during its next session starting on 24 February.
Palestinian Foreign Minister Riad Malki hailed the list as a "victory for worldwide law and for the diplomatic effort to dry up the sources of the colonial system represented by illegal settlement in the occupied Palestinian territory".
The list is dominated by Israeli companies, including major banks, construction companies, supermarkets and gas stations.
Among these was the US-based home-renting company Airbnb.
Pompeo asserted, "The United States has not provided, and will never provide, any information to the Office of the High Commissioner to support compilation of these lists and expresses support for USA companies referenced".
"I am conscious this issue has been, and will continue to be, highly contentious", United Nations rights chief Michelle Bachelet said. Though Palestinians and much of the world view the settlements as illegal under worldwide law, the United States and Israel dispute this.
"We demand the companies immediately close their headquarters and branches inside illegal Israeli settlements because their presence contradicts global and United Nations resolutions", Shtayyeh posted on Facebook.
Last month, US President Donald Trump unveiled a peace plan that may pave the way for Israel annexing the settlements. With wide worldwide backing, the Palestinians claim all of the West Bank, captured by Israel in 1967, as part of a future independent state.
"We will fight this declaration with all our might", said Prime Minister Benjamin Netanyahu.
For decades, the USA joined the rest of the worldwide community in criticizing settlement construction. Under American pressure, he later put his annexation plan on hold until after March 2 elections.
The report's authors called on the council to set up "a group of independent experts" to update the database each year. The report said its authors had communicated directly with the companies to allow them to defend themselves or say whether they had changed their practices.
Human Rights Watch's deputy advocacy chief Bruno Stagno celebrated the publication of the database.
In an address to the UN Security Council on Tuesday, Palestinian Authority President Mahmoud Abbas reiterated his rejection of Mr Trump's plan, describing the proposed Palestinian state as looking "like a Swiss cheese". The movement says it advocates nonviolent tactics to protest Israel's treatment of the Palestinians.
"Working at the behest of the notorious UN Human Rights Council, the UN Office for the High Commissioner for Human Rights has officially made a decision to endorse anti-Semitic BDS by issuing a defamatory list of companies it claims are supposedly involved in "settlement activity", NGO Monitor Legal Adviser Anne Herzberg said in a statement responding to the UN's publication of the blacklist". Associated Press writer Dee-Ann Durbin in Detroit contributed.