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Workers removed signs from the British Consulate General in occupied East Jerusalem on Thursday as an Israeli deadline expired, with Israel declaring the mission closed and Britain saying it will stay open under a new name, the "UK Mission, Jerusalem."
"The British Consulate in Jerusalem ceases operations today," Israeli Foreign Minister Gideon Saar said, adding that the consul general and 20 diplomats would leave Israel, leaving only seven in a limited role.
The last-minute understanding, reached late Wednesday, appeared to avert a major diplomatic crisis between the longtime allies after Israel ordered the consulate shut over British sanctions on West Bank settlements.
British Foreign Secretary Ed Miliband said the U.K. does not accept that Israel "has the legal right to close the British Consulate General in Jerusalem, which has been there for nearly 200 years."
"The UK government reiterates its long-standing view that East Jerusalem is occupied territory," he said in a statement.
"Following discussions with the government of Israel, our Consulate General building will not be closing, and will be known as the UK Mission, Jerusalem from today," Miliband said.
"The UK Mission, Jerusalem is independent, operational, and will continue to deliver vital services and our work with the Palestinian people," he added.
Miliband said Britain had "temporarily withdrawn a number of staff and families to ensure their safety and security."
"We will work in the coming months to build back up our presence, and we will not take reciprocal action while such discussions are under way and credible," he said.
Sources had told Reuters earlier this week that Britain was prepared to consider expelling Israeli diplomats if the mission closed. Miliband backed away from that threat, arguing it would be unwise during Israel's election campaign.
Israel votes on Oct. 27.
Saar said Israel had implemented measures announced on Sept. 8, including removing British representatives from the Gaza aid coordination center in Kiryat Gat, halting British training of Palestinian Authority forces and barring 12 Britons from entering Israel.
"We established a clear principle: It is not possible to act against Israel without Israel taking appropriate measures in response," Saar said, adding, "We did not want to reach this point, but the actions of the UK Labour government brought us here."
Saar also accused Britain of "false accusations against Israel," including of "ethnic cleansing."
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Israel issued a 30-day deadline on Sept. 8 after Britain and 11 other countries announced sanctions on trade with Israeli settlements in the occupied West Bank.
Miliband told parliament last month that settler "terrorists" were carrying out ethnic cleansing of Palestinians in parts of the West Bank, which Israel disputes.
Founded in 1839, the consulate in the Sheikh Jarrah neighborhood handles Britain's relations with Palestinians in Jerusalem, the West Bank and Gaza.
The order does not affect the British Embassy in Tel Aviv.
"Our building remains open, our staff remain doing important work," Britain's Middle East minister, Stephen Doughty, told Sky News.
Vincent Fean, a former U.K. consul general to Palestine, said losing 20 staff "is a big drop but it's a better outcome than nothing," as the renamed Jerusalem consulate continues with a reduced team.
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