The United States will merge the U.S. Consulate in Jerusalem, which serves Palestinians, with its new embassy in Israel, creating a single diplomatic mission, Secretary of State Mike Pompeo said on Thursday.
The move effectively downgraded the status of the U.S.'s main diplomatic mission to the Palestinians.
The announcement, which was immediately denounced by the Palestinians and hailed by Israel, is the latest Trump administration decision to align with Israeli government views and a victory for U.S. Ambassador David Friedman, who had long sought to end the Jerusalem consulate's independent status but had faced resistance from within the State Department.
Friedman's push picked up steam in May after the Trump administration moved the embassy from Tel Aviv to Jerusalem over the vehement objections of the Palestinians, who claim the eastern part of the holy city as the capital of an eventual state.
The consulate had for years served as a de facto embassy to the Palestinians but will now be known as the Palestinian Affairs Unit of the U.S. Embassy to Israel. It will remain in its current location, at least for now, the State Department said.
The step means that the Jerusalem consulate will no longer have a separate channel to Washington to report on Palestinian affairs and will no longer be run by a consul general with authorities tantamount to those of an ambassador.
The merger is intended to "achieve significant efficiencies and increase our effectiveness," Pompeo said in a statement. He stressed that it did not signal any change in U.S. policy toward the status of Jerusalem or the Palestinian territories.
"The United States continues to take no position on final status issues, including boundaries or borders," he said. "The specific boundaries of Israeli sovereignty in Jerusalem are subject to final status negotiations between the parties."
The administration, Pompeo said, remains "strongly committed to achieving a lasting and comprehensive peace that offers a brighter future to Israel and the Palestinians. We look forward to continued partnership and dialogue with the Palestinian people and, we hope in the future, with the Palestinian leadership."
Although Pompeo sought to portray the move as a bureaucratic management shift, the downgrading of the consulate has potent symbolic resonance, suggesting American recognition of Israeli control over east Jerusalem and the West Bank.
Deputy Public Diplomacy Minister at the Prime Minister's Office Michael Oren welcomed the move, tweeting, "A great day for Israel, Jerusalem, and the United States. Closing the U.S. consulate in Jerusalem and transferring its responsibilities to the embassy ends the last vestige of American support for the city's division. Israel is deeply grateful."
Chief Palestinian negotiator Saeb Erekat denounced the decision, saying it was the latest evidence the Trump administration is "adopting the Israeli narrative" and working with Israel to impose a "Greater Israel" rather than a two-state solution.
"The decision has nothing to do with efficiency and a lot to do with pleasing an ideological U.S. team that is willing to disband the foundations of American foreign policy, and of the international system, in order to reward Israeli violations and crimes," he said.
Nabil Shaath, a top adviser to PA President Mahmoud Abbas, said it was a "very bad decision" that violated past agreements and continued President Donald Trump's decision to recognize Jerusalem as Israel's capital.
"Now, he is cutting the last connection he is said to have with the Palestinian people. He is practically saying Jerusalem is for Israel," Shaath said. "This decision has nothing to do with peace. It complicates peace and makes it impossible."