Israel and the U.K. reached a deal Thursday to keep a reduced British diplomatic presence in Jerusalem serving Palestinians even as their post was diplomatically downgraded.
Israel ordered the British Consulate in Jerusalem to formally close, sending home the consul general and 19 other staffers, while allowing a smaller mission there. London meanwhile agreed not to retaliate against Israeli diplomatic posts in the U.K.
The closure, triggered by the U.K.'s recent ban on trade from Israeli settlements in the West Bank, comes as Israel prepares for an election this month that pits Prime Minister Benjamin Netanyahu in a tough race against his opposition. It provides Netanyahu's government a means to retaliate against Europe over its hardening stance on settlements, but also leaves the door open to Israel restoring the post later.
In announcing the closure, Israeli Foreign Minister Gideon Saar said that "any country that acts against Israel must know there will be a price." It will be renamed as the U.K. Mission in Jerusalem and the scope of its work with Palestinians will remain the same, according to a person familiar with the matter.
Both Saar and British Foreign Secretary Ed Miliband said that a small team of diplomats would remain at the building, though it will be stripped of its consular name.
"We have been clear that we do not accept that the government of Israel has the legal right to close the British Consulate General in Jerusalem, which has been there for nearly 200 years," Miliband said. "The U.K. government reiterates its long-standing view that East Jerusalem is occupied territory."
On Thursday, workers removed a plaque identifying the facility as a British consulate. Under diplomatic protocols, consulates support a main embassy of a nation in a foreign country. Host nations can downgrade that presence, like Israel did, in order to show their intense displeasure. However, they can later upgrade them again if ties improve.
The dispute took root after the U.K. and other European nations announced they would impose sanctions over the expansion of Israeli settlements in the occupied West Bank, which Miliband at the time described as "ethnic cleansing."
Ties between the U.K. and Israel have deteriorated as the Labour government has taken a harder line on Israel, partly in response to growing public anger over the country's prosecution of the Gaza war.
Former U.S. and Israeli diplomats said that while the impacts may be limited for now, the dispute signals the trajectory of Israel's relationships with much of Europe. Israel's policy of supporting settlement expansion, its perceived lenience toward rising settler violence and its refusal to offer a pathway to Palestinian statehood have brought their already-strained ties to the brink.
"It seems as though both sides are looking to have it both ways, to take a stand on principle and to avoid significant deterioration in the bilateral relationship," said Dan Shapiro, who served as U.S. ambassador to Israel under President Barack Obama. "That suggests that there's something worth preserving that both sides want to sustain, but it also betrays some very real tensions."
Josh Krasna, a former Israeli diplomat, said Israel has been in defensive mode for much of the past three years amid the tide of criticism, but the current escalation isn't irreversible and could be partly driven by internal politics in both countries.
"Right now they're thumping their chests, but if the affected countries take counter steps of their own, that might be something Israel begins to worry about," he said.
The British first opened a consulate in Jerusalem in 1838. The current consulate building sits in East Jerusalem's Sheikh Jarrah neighborhood.
Israel won control of East Jerusalem in the 1967 war and later declared sovereignty over it. The United Nations and most of the international community don't recognize Israel's claims to sovereignty and regard Jewish settlements there as illegal. The Palestinians call for the territory to be part of their hoped-for independent state comprising the Gaza Strip and the West Bank.
Several countries operate consulates in East Jerusalem that serve as de facto diplomatic missions to the Palestinian territories, while their embassies to Israel sit in Tel Aviv. The U.S. moved its embassy to Jerusalem in 2018 during President Trump's first term, and last year folded its Office of Palestinian Affairs into that mission.
Europeans describe the sanctions effort as a means to support the two-state solution, the idea of which has become less tangible since the Hamas-led attacks on Israel three years ago.
Netanyahu has opposed a two-state solution, calling it an existential threat to Israel's security. Public support for it in Israel also has declined over the years.
In January, Israel began tearing down the East Jerusalem headquarters of the U.N.'s main agency tasked with providing assistance to Palestinian refugees. The compound had been largely vacant after laws limiting the operations of the U.N. Relief and Works Agency went into effect.