Thursday's announcement comes over five months after the inauguration of the US Embassy to Israel in Jerusalem.
Pompeo asked the US Ambassador to Israel, David Friedman, to guide the merger. He also announced the stationing of a new Palestinian Affairs Unit inside the US Embassy Jerusalem, through which a full range of reporting, outreach, and programming in the West Bank and Gaza as well as with Palestinians in Jerusalem shall be conducted.
Pompeo mentioned that the decision finds impetus from the US' global efforts to improve the efficiency and effectiveness of the nation's operations. He, however, clarified that the decision does not signal a change in the US' policy on Jerusalem, the West Bank, or the Gaza Strip.
The Secretary of State also reinforced US President Donald Trump's statement from December 2017, in which the latter had proclaimed that the United States continues to take no position on final status issues, including boundaries or borders. "The specific boundaries of Israeli sovereignty in Jerusalem are subject to final status negotiations between the parties," the statement mentioned.
Furthermore, Pompeo said "The Administration is strongly committed to achieving a lasting and comprehensive peace that offers a brighter future to Israel and the Palestinians," while mentioning that the US "looks forward to continued partnership and dialogue with the Palestinian people and, we hope in the future, with the Palestinian leadership."
This decision received backlash from the Palestinians who said that the merger has "symbolic significance" as it downgrades the standing of the consulate, reports Al Jazeera.
Trump has earlier been condemned for officially recognising Jerusalem as the capital of Israel.