Most diplomats will leave the British consulate in occupied East Jerusalem, Israel says, but the UK insists the building "will not be closing", and will operate as a " UK Mission"." Israel said in September it would shut the consulate, in retaliation for UK sanctions on Israeli settlements in the occupied West Bank which are illegal under international law.

The UK government had made last-ditch efforts to persuade Israel not to close the British consulate ahead of Thursday's deadline, after the Israeli government said it would close the consulate within 30 days of the UK sanctions announcement. The consulate, which was first established in 1838, handles UK relations with Palestinians in Jerusalem as well as in the West Bank and Gaza.

It is distinct from the UK embassy in Tel Aviv, which is the UK's main diplomatic hub with Israel. Israeli Foreign Minister Gideon Saar said the country had implemented measures announced on 8 September in response to UK sanctions."

The British Consulate in Jerusalem is closing its operations today. Accordingly, the sign of the British Consulate in Jerusalem has been removed," he wrote on social media.

However, the British flag could still be seen outside on Thursday morning, and several staff were seen entering. Saar said talks with the UK government had resulted in agreement on certain principles, including that "the consul general and 20 diplomats (including the consul general) are ending their duties and will leave Israel."

But Saar acknowledged that the building is "the property of the British government" and said Israel had authorised "a task force of only seven diplomats with a very limited scope of activity" to operate in the building. Israeli media had been reporting that the UK had threatened to expel Israeli diplomats from London - raising the prospect of further damaging bilateral relations.

This agreement is a compromise of sorts and means - for the moment - the heat has been taken out of a dispute that could have further worsened UK-Israel relations. Israel can claim that the British Consulate is "closing its operations".

A score of British diplomats, including the consul general, are leaving. But Milib and says they are going only temporarily and only for their safety and security.

He continues to insist Israel has no legal right to close the consulate." The UK government reiterates its long-standing view that East Jerusalem is occupied territory," Milib and wrote in a statement.