Maccabi Haifa will play their three home Champions League ties in Nicosia.
UEFA has confirmed permission for the Israelis to play on in Cyprus while Israel itself remains out of bounds because of security concerns.
Maccabi have been drawn in Group F along with Manchester United, Bayer Leverkusen and Olympiakos Piraeus.
A UEFA spokesman said: “We keep the security situation under review but it is necessary to plan ahead for the Champions League matches and it makes sense for Maccabi to continue to play in Cyprus.”
This is the first time an Israeli club have qualified for the first group phase of the Champions League.
By Keir Radnedge