Two countries tied in vote after Bolivia, Ethiopia, Kazakhstan and Sweden are chosen for non-permanent seats.
The proposal came on Tuesday, after five rounds of voting at the 193-member UN General Assembly, where neither of the countries could attain the two-thirds majority vote needed.
Each received 95 votes in the last round.
In earlier voting, Bolivia and Ethiopia - both running unopposed - and Kazakhstan and Sweden secured their two-year council mandates in the most contested elections in years.
Italian Foreign Minister Paolo Gentiloni said the proposal of a shared seat was symbolic because it was a "message of unity between two European countries".
A European diplomat, who spoke to DPA news agency on the condition of anonymity, called the decision a "truly European gentlemanly agreement".
The diplomat said the two countries will need to come up with an agreement allowing one to attain the official two-thirds majority in the General Assembly vote, with the understanding that it will hand the post to the other country after a year.
The elected countries will begin a two-year stint on the council on January 1, taking their seats alongside the five permanent council members - Britain, France, China, Russia and the United States.
The other five non-permanent members are: Egypt, Japan, Senegal, Ukraine and Uruguay.
As the most powerful body of the United Nations, the Security Council can impose sanctions, endorse peace accords and authorise the use of military force.
It also oversees 16 peacekeeping missions in the world, with a budget of about $8bn.
Italy, the Netherlands and Sweden were competing for two spots while Kazakhstan and Thailand were squaring off for a seat reserved for Asia.
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Italy was also seen as a player in efforts to pull Libya out of chaos.
The Netherlands, home to the International Criminal Court and other world tribunals, played up its commitment to international justice while Sweden highlighted its role as a major aid donor.
Vying for a council seat for the first time since its 1991 independence from the Soviet Union, Kazakhstan has been criticised for cracking down on journalists and political activists.
Thailand's rights record has also been questioned, after the military leadership, which seized power in May 2014, has banned political activity and ramped up prosecutions under tough sedition and royal defamation laws
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