Slovenia looked to be within touching distance of the quarter-finals with a big first-half advantage over Israel.
They scored the game’s first nine points, and hadn’t missed a shot by the time they led 27-10. Slobodan Subotic’s men struggled against the press and their opponents fought back.
With the contest close throughout the fourth quarter, Israel won with a dramatic Tal Burstein jump shot just 2.7 seconds from the end.
Israel now find themselves in a quarter-final against Spain and just 40 minutes away from an Olympic berth.
"I still can't believe it,” a distraught Subotic said. "We lost the game and are out. We failed in the last quarter."
Hopes were sky high in Slovenia after their tournament-opening win over Italy, and a second group victory over Bosnia-Herzegovina.
"After so many positive results, this is not possible," Subotic said.
The man stalking the other sidelines, Israel coach Muli Katzurin, risked turning into a pariah when kicking Gur Shelef off the team last month for criticising his decisions in the press.
Katzurin’s teams lost game after game during their preparations, and even suffered heavy defeats to Germany and Lithuania once the championships began before beating Latvia to make the elimination round.
If he can engineer a huge upset of Spain, Katzurin will be deemed a miracle worker.
"This is a big victory for our basketball," he said. "We believe in ourselves and fight to the last minute.
"We scored the decisive points and we are in (the quarter-finals) now."
|“||I don't blame any of the players. I take the loss on my shoulders.||„|
"It has happened at a time for a lot of these players who will say goodbye to the national team and leave their place to younger ones."
One of those players, Marko Milic, the high-flying star for Slovenia who played briefly in the NBA, acknowledged he is likely at the end of his international career despite being just 26 years old.
"I am very disappointed," he said. "We played well in all the matches up to this one. I don't know, but I will probably leave the national team."
Subotic also appears to be at the end as the national team boss.
"My contract with the federation ends with this European championship," he said.
"I will need lot of time to think if I want to work in Slovenian basketball.
"I don't blame any of the players. I take the loss on my shoulders."