Workers remove signage from British consulate in Jerusalem but defy Israel's demand to shut it down after Labour sparked anger by announcing sanctions

Britain said on Thursday its nearly 200-year-old consulate in Jerusalem would remain operating at a smaller scale, renamed as the 'UK Mission' in the city, after Israel ordered it shut in a dispute over sanctions on settlements. Israel last month issued a 30-day deadline for Britain to close the consulate after London announced sanctions targeting Israeli settlements in the occupied West Bank, a dispute that has strained relations between the longtime allies.

The deadline expired on Thursday. A plaque reading 'British Consulate General' and another sign for its consular section were seen being removed by workers last night, though a British flag was still flying over the building. Gideon Saar, Israel's foreign minister, said in a statement that the consulate, in East Jerusalem, would formally end operations but that some British diplomats would be allowed to continue work in the building under a deal struck between Israel and Britain.

In a statement, Foreign Secretary Ed Miliband said: 'We have been clear that we do not accept that the Government of 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. '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. 'The UK Mission, Jerusalem is independent, operational, and will continue to deliver vital services and our work with the Palestinian people.'

A combination image shows the British consulate in East Jerusalem before the removal (top), and with the signage removed (bottom) He continued: 'This will ensure that we maintain our long-standing British presence and the UK's role in support of a two-state solution. Without an understanding, we would not have the necessary assurances for the security and protections of our staff and premises. 'Accordingly, the UK has temporarily withdrawn a number of staff and families to ensure their safety and security.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 underway and credible. 'The UK stands steadfast by the measures we took on 8 September, in concert with the international community, in support of a two-state solution to deliver peace and security for the people of Israel and Palestine.' A senior Israeli diplomatic source told the Daily Mail: 'The British consulate is closing.

It will no longer have the diplomatic standing of a consulate, nor will it provide consular services. Its operations will be drastically reduced, with diplomatic staff cut from 27 to just seven. 'This decision comes in response to a series of anti-Israel measures taken by the Labour government, including its recognition of a Palestinian state, renewed funding for UNRWA, sanctions and restrictions on Israeli arms. 'The British mission has been operating under Israeli diplomatic privileges and permissions while pursuing policies that Israel considers unilateral, biased and hostile to the state.

We are no longer prepared to allow that arrangement to continue.' They continued: 'Following discussions between Israel's Ministry of Foreign Affairs and Britain's Foreign, Commonwealth and Development Office, it was agreed that seven British diplomats would remain in the building, which belongs to the British government. The remaining presence will have a very limited scope and will no longer function as a consulate. 'Israel could have expelled all British diplomatic personnel from the premises, but we have deliberately chosen not to do so because we have no interest in further deteriorating diplomatic relations.

Traffic barriers surround the British consulate in East Jerusalem as Israel threatens to close it Ed Miliband was condemned on Tuesday for a controversial handshake with Iranian Abbas Araghchi minister at the UN that happened while it plots terror attacks in the UK 'Nigel Farage has said that if he were to come to power, he would reverse the damaging steps taken against Israel. One would imagine that if Britain rolled back its measures against Israel, Israel would also roll back its own measures in response. 'There is always an opportunity to reset relations through goodwill and genuine dialogue.

However, the Labour government has failed to engage in genuine dialogue with Israel.' On Tuesday, Shadow Foreign Secretary Tom Tugendhat accused Mr Miliband of pursuing a 'personal agenda' in his hardline against Israel . In a scything attack Mr Tugendhat said it was time to stop treating the Foreign and Development Office like 'an international NGO' and use it to project British power abroad. He took aim at his opposite number for a controversial handshake with Iranian counterpart Abbas Araghchi at the UN last month against a backdrop of state-sponsored terrorism in the UK.

And Mr Tugendhat, the former security minister, lashed out at the decision to hit Israel with sanctions over its illegal West Bank settlements, which led to a major falling-out with a key security ally. To applause at the Conservative Party Conference in Birmingham he said: 'We think it is wrong to have a man in the Foreign Office who ties our energy to China instead of deepening and strengthening our union by tapping resources from the North Sea. 'We think it is wrong to have a Foreign Secretary who chooses to virtue signal over intelligence sharing in a way that will keep Britain safe, because that isn't serving the British people. 'That is serving his personal agenda.'

UK officials have been scrambling to reach a deal to keep the building open but Israeli foreign minister Gideon Saar last night insisted his country was holding firm. 'We think it is wrong to have a Foreign Secretary who chooses to virtue signal over intelligence sharing in a way that will keep Britain safe, because that isn't serving the British people. Benjamin Netanyahu told the Daily Mail: 'Britain under Burnham is like a rogue state - attacking Israel while appeasing an Islamist, leftist alliance' 'That is serving his personal agenda.'

The UK's top national security adviser, Jonathan Powell, quietly visited Israel last week in an attempt to keep the consulate open but failed to reach an agreement. The move will see the consulate's diplomatic status removed and legally bar around 30 diplomats from operating out of the building. Israel is unlikely to send diplomats and their families home, instead pushing them to work from the British embassy in Tel Aviv, The Times reported.

Britain has threatened to expel Israeli diplomats from London if its overseas staff are sent home. The consulate has been in Jerusalem for almost 200 years, long before the state of Israel was established in 1948. It handles UK relations with Palestinians in Jerusalem, as well as in Gaza and the West Bank. The United Nations and most countries consider the settlements to be illegal under international law. Israel disputes this. Britain's presence in the city dates back almost 200 years, long before the State of Israel was established in 1948.

The closure order does not affect Britain's embassy in Tel Aviv, which handles diplomatic relations with Israel's government. The consulate, in the Sheikh Jarrah neighbourhood of East Jerusalem, handles Britain's relations with Palestinians in Jerusalem, as well as in the West Bank and Gaza. It also provides consular services to Palestinians. Britain's Foreign Office on Wednesday declined to comment when asked whether the consulate was still operating or any British diplomats working there had returned to the UK.

Sources have said the order to close the consulate affects around 30 British diplomats along with their family members. Britain is considering expelling Israeli diplomats from Israel's embassy in the United Kingdom in response to any closure of the consulate, according to sources. It would be a highly unusual step for the allies to expel each other's diplomats. Despite the current strains, the UK and Israel are close economic, security and intelligence partners.

The British sanctions announcement, and Israel's order to close the consulate, mark a new low in a relationship that has deteriorated over the past three years. Britain ⁠has repeatedly criticised Israel over its actions in the war in Gaza and over Israeli settler attacks on Palestinians in the West Bank. Benjamin Netanyahu's government has accused Labour of being hostile towards Israel. Last week, Netanyahu told the Daily Mail that 'Britain under Burnham is like a rogue state - attacking Israel while appeasing an Islamist, leftist alliance'.

The Israeli PM made the comments in response to the UK's decision last month to ban trade with Israeli settlements on the West Bank, which followed Keir Starmer's decision to withhold some arms licences and to recognise a Palestinian state before all of the October 7 hostages had been freed. He was particularly incensed by the move because it coincided with Israeli intelligence tipping off the UK's security services about an impending Iran-sponsored 'murderous attack' on RAF Fairford. 'It was stopped.

It was prevented,' he said, adding that, without the intelligence Israel provided, 'it would probably have gone through and we don't know how many British lives would have been lost'. Netanyahu insisted Israel still regarded London as an ally, but then launched an extraordinary broadside against the Government. 'It's mind-blowing hypocrisy, I don't know how many lives we have saved giving Britain information about impending attacks. 'They're appeasing, they're attacking Israel, [the country] that is fighting the terrorists in the terrorist regime that is attacking them.

They appease their enemies, and they attack their protectors, really. That's what's happening. But this is a twist of both logic and justice. It doesn't serve Britain well, it doesn't serve the world well.' READ MORE: Benjamin Netanyahu tells NATALIE LISBONA: 'Britain under Burnham is like a rogue state - attacking Israel while appeasing an Islamist, leftist alliance ' READ MORE: Ed Miliband's 'personal agenda' hurting the UK says Tom Tugendhat in blast at 'virtue-signalling' Israel sanctions, handshake with top Iranian and green fixation