The move means that the consulate will stop acting as an independent diplomatic mission and the Palestinians will be forced to work with an entity that is subordinate to U.S. Ambassador to Israel David Friedman.
"There will be complete continuity of U.S. diplomatic activity and consular services during and after the merger", read a statement from State Department spokesman Robert Palladino. Nabil Shaath, adviser to Palestinian President Mahmoud Abbas, said it was a "very bad decision" that violated past agreements and continued US President Donald Trump's decision to recognize Jerusalem as Israel's capital. It will be subsumed into the Embassy to Israel. "It is an act of political assault on Palestinian rights and identity, and a negation of the consulate's historic status and function, dating back almost 200 years". The majority of the worldwide community believes that the status of the city should be discussed through direct negotiations between the Palestinians and the Israelis.
But in response, a senior Israeli diplomatic official told Hebrew media that "the issue was never discussed".
President Donald Trump is preparing to unveil a long-awaited Middle East peace plan, but Palestinian officials have refused to engage with his envoys since his controversial decision in December 2017 to recognise Jerusalem as Israel's capital and relocate the U.S. embassy to the city from Tel Aviv. And we've seen ties between the USA and Palestinians deteriorate.
The US decision has been met with a storm of opposition from a wide spectrum of American diplomats.
It reiterated support for the two-state solution based on the pre-1967 borders and said it would continue to oppose any action detrimental to peace efforts.
Twenty-five years after America first pledged to do so, the new USA embassy opened in Jerusalem; Benjamin Hall reports. America should be playing the taps.
Palestinians launched a wave of attacks against Israelis and Israeli soldiers in late 2015 after perceived changes to the status quo at the revered holy site in East Jerusalem known as the Haram Al Sharif.
"Reports about construction in new settlements will now be overseen by Ambassador Friedman, a longtime supporter of the settlement enterprise".
"We will do everything to speed up the demolition of these murderers' homes just like the murderer of Ori Ansbacher", Netanyahu charged, referring to the Jerusalem teenager raped and murdered last month.
Located near Jerusalem's Old City, it has been the home of the consul general since 1912, while the U.S. permanent diplomatic presence in the city was established in 1857.
The US also rented another building in 1951 on Nablus Road and this was kept as a US consular building until September 2010.