WARSAW, Poland (AP) — Poland's government said Monday that its ambassador to Israel will remain in Poland until further notice after Israel downgraded diplomatic ties with Warsaw and strongly criticized a new Polish law that restricts the rights of Holocaust survivors to reclaim property seized by the country’s former communist regime.

Meanwhile, Poland's Prime Minister Mateusz Morawiecki defended the new legislation, saying that it will end a period of criminal abuse in his country.

The spat erupted after P oland's president's signed the new law on Saturday despite heavy pressure not to by the United States government and warnings from Israel that it would harm ties.

Israeli Foreign Minister Yair Lapid denounced it as "an immoral, anti-Semitic law” as he recalled his nation's top diplomat from Poland only hours after it was signed by President Andrzej Duda. Israel also suggested that the Polish ambassador, who was on vacation in Poland, not return to Israel.

Poland's Foreign Ministry said Monday that Ambassador Marek Magierowski would stay in Poland until further notice in response to what it called “unjustified actions” by Israel and “unacceptable statements” by Lapid and other government members.

The dispute is the latest to erupt over history between Poland, home to Europe's largest Jewish community before World War II, and Israel, which was founded as a safe haven for Jews driven from Europe by German dictator Adolf Hitler and his helpers.

An earlier crisis broke out in 2018 over a Polish law that would have criminalized false claims of Poland collaborating with Nazi Germany. Israel saw it as an attempt to whitewash Polish crimes against Jews during the Holocaust. The legislation was eventually watered down.

“The negative impact on our ties began the moment that Poland chose to begin passing laws aimed at harming the memory of the Holocaust and the Jewish people in 2018," Lapid said on Sunday. “Gone are the days when Poles harmed Jews without consequence."

The new legislation establishes that any administrative decision issued 30 years ago or more can no longer be challenged, meaning that most property owners who had their homes or business seized in the communist era can no longer get compensation.

Israel says Poles today are profiting from the homes and business which were taken first by Nazis and then by the Polish communist regime.

Poland argues that it was the victim of Germany and does not bear responsibility for the consequences of the original seizure of properties.

Morawiecki on Monday defended the law, arguing that it was needed to fight fraud carried out by criminals who have claimed in courts to represent prewar owners, thus gaining ownership of valuable properties to which they had no rights.

“Wild re-privatization has led to many human tragedies in Poland. Tens of thousands of people have been thrown out of the homes in which they have lived all their lives -- just because there was a law in our law that allowed for an indefinite ‘return’ of real estate,” Morawiecki said.

He said the new law “restores elementary justice and the rule of law in Poland.”

The law does not distinguish between Jews and non-Jews, and the vast majority of those who will be affected by the legislation are expected to be non-Jews.

Nonetheless, the issue looms large in relations with Israel and with the United States due to the determination by both countries — as homes to many Holocaust survivors — to defend their interests.

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Josef Federman in Jerusalem contributed.

Vanessa Gera, The Associated Press