In a superb atmosphere, the game went down to the wire and the home team held their nerve down the stretch to win it from the free-throw line.
Tied up at 72-72 with a little over two minutes remaining, Israel made five of six from the stripe and locked down the visitors with their defence when it really mattered.
The hosts started strongly and moved into a 26-18 advantage but Montenegro showed why they had not lost previously with Nikola Pekovic scoring four free-throws to keep his team firmly in touch.
When Yotam Halperin opened the scoring in the second with a three-pointer, it looked like Israel might accelerate away but instead it was Montenegro who made the next run to stun the home crowd as they went 30-29 in front.
By half-time the scores were tied at 40-40 and not surprisingly the fans were anticipating more quality in the second half.
Montenegro began to showcase their talent and strength and went 52-44 ahead through another score by the impressive Pekovic.
The home fans were seriously worried and looking down the barrel of a second defeat after their shock loss to Finland, the hosts had to respond and they did. A bi triple to finish the quarter by Casspi got them back to within two points at 61-59.
It was to prove to be hugely important as Israel clawed their way back before showing they had ice running through their veins by sinking their free-throws in a tense finale.
Lior Eliyahu had 17 points for the winners while Pekovic top scored for the losing tam with 20.
Israel head coach Ari Shivek:
"The last few minutes had the same script as the game against Finland. The players did an amazing job. Montenegro are an amazing group who have scored more than 65 points in all their games. Because of that we wanted to play more offensive."
Israel player Omri Casspi:
"It was a great victory against a great team. We needed to restore our honour after the Finland defeat. It is important for me to take responsibility and the leadership against such a strong opponent and finish stronger."