UNITED NATIONS, July 20 (Xinhua) -- The United Nations on Friday expressed concern over the newly passed "nation-state" law by the Israeli Knesset, which critics say institutionalizes discrimination against the country's Arab minority.

"We reaffirm the United Nations' respect for the sovereignty of states to define their constitutional character while emphasizing the need for all states to adhere to universal human rights principles, including the protection of minority rights," said Farhan Haq, a UN spokesman.

A negotiated two-state outcome of the Palestinian-Israeli conflict in line with UN resolutions and previous agreements is the only way to achieve enduring peace that resolves all permanent-status issues and realizes the national aspirations of both peoples, Haq told a daily press briefing.

"We call once more on all parties to refrain from unilateral moves that undermine the two-state solution."

The Knesset, Israel's parliament, on Thursday narrowly passed the controversial bill that defines Israel as the nation-state of the Jewish people. It states that only Jews have the right of self-determination in Israel.

The law also revokes Arabic of its status as an official language alongside Hebrew. Arabs comprise about 20 percent of Israel's 9 million population.