* FIFA creates body to monitor Palestinian situation
Related Stories
- Tense talks on Israel expulsion vote at FIFA AFP
- Israel to mull Palestinian football improvements AFP
- Soccer-Palestine FA will not drop request to suspend Israel Reuters
- Palestinian FA to press for FIFA ban on Israel AFP
- Soccer-Blatter proposes holding Israeli-Palestinian 'peace match' Reuters
* Netanyahu hails Palestinian "failure" to freeze Israel
* Ordinary Palestinians disappointed over outcome (Adds reaction from Israeli prime minister, Palestinians)
By Brian Homewood
ZURICH, May 29 (Reuters) - Palestine unexpectedly dropped its motion to suspend Israel from international football on Friday amid highly-charged scenes at the FIFA Congress.