The 15-nation council unanimously adopted a resolution on Friday prolonging the mandate of the force of 1028 soldiers through to 31 December after both Israel and Syria gave their consent.
The UN Disengagement Observer Force, known as UNDOF, was created in May 1974 to monitor a ceasefire and troop disengagement agreement that followed the 1973 Arab-Israeli war.
In that war, Israel repulsed an attempt by Arab states to take back land, including the Golan Heights, which Israel had captured in the six-day 1967 Middle East war.
Security council approval
UNDOF's mandate would have expired at the end of June without the Security Council's approval.
Secretary-General Kofi Annan reported to the Security Council earlier this month that the area remained generally quiet in the past six months except in the disputed Shebaa Farms border enclave.
"The situation in the Middle East is very tense and is likely to remain so unless and until a comprehensive settlement"
But he said he considered the force's continued presence to be essential.
"The situation in the Middle East is very tense and is likely to remain so unless and until a comprehensive settlement covering all aspects of the Middle East problem can be reached," he said.
Israel occupies the strategic Shebaa Farms area, adjacent to the border between northern Israel and southern Lebanon.
Israel and the United Nations say the area is a part of Syria's Golan Heights but Syria and Lebanon say it belongs to Lebanon.
While there has been talk of extending UNDOF's reach to include that area if Israeli forces ever chose to withdraw from Shebaa, that idea did not come up in closed-door council discussions of the force's renewal, council members said.
Lebanon and Syria have called on
Israel to withdraw from Shebaa
Arab states, siding with Lebanon and Syria on the Shebaa issue, have been calling for Israel to withdraw because of the council's Resolution 1559, adopted in September, which called for the withdrawal of all foreign forces from Lebanese soil.