WARSAW, Poland—Israel on Saturday condemned Poland’s approval of a law that restricts the rights of Holocaust survivors or their descendants to reclaim property seized by the country’s former communist regime and announced it was recalling its top diplomat in protest. The move ignited a diplomatic crisis between Israel’s new government and the nationalist conservative government in Poland. After years of close ties under former Prime Minister Benjamin Netanyahu, Israel’s new government, which includes top officials who are the children of Holocaust survivors, has taken a far more confrontational approach. Polish President Andrzej Duda earlier in the day signed the law, which addresses appropriations done by the communist government that ruled Poland from the end of World War II until 1989. The law itself says nothing about the Holocaust or World War II. Instead it establishes that any administrative decision issued 30 years ago or more can no longer be challenged, …