In another surprise, Argentina are fourth in the rankings despite struggling to qualify for the World Cup after drawing their last two games - away to Uruguay and at home to Venezuela.
After wins against Moldova and Austria in this month's World Cup qualifying, Wales have moved up five places.
But Gordon Strachan's side remain the lowest-ranked British Isles team.
A high-placed ranking could mean a more favourable draw for the World Cup next summer.
Wales have leapfrogged England after the global break, moving up five places into 13th while Gareth Southgate's side have dropped by two spots to 15th.
Israel endorses independent Kurdish state
The ministry also called on Iraq's Kurdish region "to act with good sense and abandon this erroneous approach immediately". It described the Iraqi Kurdish leadership's "increasingly emotional statements" in favor of independence as "alarming".
Cameroon, whom Super Eagles defeated 4-0 in the World Cup qualifier in Uyo, dropped 10 spots from 35th to 45th. Peru (12th), Northern Ireland (20th) and Syria (75th) have also reached record-breaking positions.
Seeded teams would avoid playing each other meaning they would not play Portugal, Switzerland or Italy depending on who qualify.
World champions Germany pushed Brazil back into second place to return to the top of the Federation Internationale de Football Association rankings, which was published on Thursday.
Cameroon fell 10 places to no. 45 in the world and sixth in Africa.
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