Israel, UK agree to keep east Jerusalem consulate open as limited diplomatic mission

Workers removed signs and plaques at the British consulate in east Jerusalem overnight after Israel ordered it shut by Thursday over London's plans to impose sanctions on settlements in the West Bank, further damaging strained ties between allies.

Reuters journalists saw workers in the consulate remove a plaque reading "British Consulate General" and another sign for its consular section. The British flag was still flying over the building. There was no immediate comment from the consulate.

Israel last month ordered Britain to close the consulate within 30 days and remove its diplomats from the city, after Britain announced sanctions targeting Israeli settlements in the West Bank, including a trade ban on goods made there.

Israel has been adamant that the consulate will close even as Britain sought to keep it open, including sending the country's top national security adviser to Israel last week for talks.

UK embassy in Tel Aviv to remain open

Britain's presence in the city dates back almost 200 years, long before the State of Israel was founded in 1948. The closure order does not affect Britain's embassy in Tel Aviv, which handles diplomatic relations with Israel's government.

The consulate, in the Sheikh Jarrah neighborhood of east Jerusalem, handles Britain's relations with Palestinians in Jerusalem, as well as in the West Bank and Gaza. It also provides consular services to Palestinians.

Britain's Foreign Office on Wednesday declined to comment when asked whether the consulate was still operating or any British diplomats working there had returned to the UK.

Sources have said the order to close the consulate affects around 30 British diplomats along with their family members.

Britain ​is considering expelling Israeli diplomats from Israel's embassy in the United Kingdom in response to any closure of the consulate, Reuters reported on Tuesday, citing sources.

It would be a highly unusual step for the allies to expel each other's diplomats. Despite the current strains, the UK and ​Israel are close economic, security and intelligence partners.

The British sanctions announcement and Israel's order to close the consulate mark a new low in a relationship that has deteriorated over the past three years.

Prime Minister Benjamin Netanyahu's government has accused Britain's governing Labour Party of being hostile towards Israel.