Hanan Ashrawi, a member of the Palestine Liberation Organization's executive committee, also criticized the decision and called on the report to be reinstated.
A Palestinian rights activist, Omar Barghouti, described the report as potentially the "first beam of light that ushers the dawn of sanctions against" Israel.
Palestinian Minister of Foreign Affairs Riyad al-Maliki also voiced deep regrets that Khalaf was forced to resign and expressed his "unequivocal objection" over the removal of the report.
Palestinian President Mahmoud Abbas has announced that he will be granting the highest Palestinian honor to a Jordanian diplomat who stepped down on Friday as the head of a United Nations commission over pressure to withdraw a report accusing Israel of apartheid.
Khalaf, a UN undersecretary-general, resigned Friday after refusing to withdraw her report for the UN Economic and Social Commission for Western Asia.
UN spokesman Stephane Dujarric had said that the report was put out on the commission's website without consulting the UN Secretariat.
Kuznetsova, Vesnina reach Indian Wells final
The 23-year-old Frenchwoman improved to 16-5 on the season, a run which includes her first career title in St. Petersburg, and an appearance in the final earlier this month in Acapulco.
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".
Israel fiercely rejects the allegation and likened the report to Der Sturmer - a Nazi propaganda publication that was strongly anti-Semitic.
"This is not about content, this is about process", Dujarric told reporters in NY on Friday.
United States ambassador to the UN Nikki Haley speaks after her first Security Council meeting, February 16, 2017. "United Nations agencies must do a better job of eliminating false and biased work, and I applaud the secretary-general's decision to distance his good office from it".
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.