The United States says it is placing its main diplomatic mission to the Palestinians under the authority of its embassy to Israel.
The State Department said Thursday that merging the Jerusalem Consulate with the newly opened Jerusalem Embassy will achieve "significant efficiencies."
But the move also has symbolic significance, by in effect downgrading the standing of the consulate.
For years, the consulate has served as a de facto embassy to the Palestinians, reporting straight to the State Department in Washington.
Placing it under the authority of the embassy could be seen as suggesting American recognition of Israeli control over east Jerusalem and the West Bank.
The Palestinians cut ties with the US after President Donald Trump recognised Jerusalem as Israel's capital last year and moved the American embassy to Jerusalem.
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