And the IFA have now invoked a Federation Internationale de Football Association clause that prevents Lafferty from playing within five days of the global window on Tuesday.
Kyle Lafferty will miss this weekend's clash with Hamilton.
Gers had hoped to talk round their IFA counterparts to enable Lafferty to face Accies at the Hope Stadium.
It has been suggested that Lafferty was nursing an Achilles problem but ringing O'Neill around midnight before the squad was due to meet up the following day to travel to an Austrian training camp was deemed unacceptable behaviour by the powers that be at Windsor Park.
"Talks have now been held among all parties and Rangers understands the position of the Irish FA".
The controversy, which left O'Neill fuming, cast a cloud over the Nations League defeats in Austria and Bosnia, but it does not mean the end of Lafferty's global career.
However, former Northern Ireland captain Iain Dowie said it was up to Lafferty to clear the air with the IFA and O'Neill - and convince them he still wants to play for his country.
The Irish FA released a statement which confirmed it will block Lafferty's participation in the Premiership match against Hamilton.
The Irish FA chose to invoke FIFA's five-day rule, which states that any player who decides to make himself unavailable citing an injury can also be blocked from representing his club for up to five days after the global break.
"This restriction on playing for the club shall, moreover, be prolonged by five days in the event that the player, for whatsoever reason, did not wish to or was unable to comply with the call-up."' The situation has placed Lafferty's global future in doubt although O'Neill refused to close the door on a return before seeing his side lose both games.