The Trump administration has made a decision to relocate its diplomatic mission to the Palestinians, placing it under the authority of the US Embassy in Jerusalem.
Essentially, the US Consulate in eastern Jerusalem has been merged with the US Embassy there, and that move has pleased some while angering others.
The step, which was announced by Secretary of State Mike Pompeo, means that the Jerusalem consulate will no longer have a separate channel to Washington to report on Palestinian affairs and will no longer be run by a consul general with authorities tantamount to those of an ambassador.
Asked if the USA government is anticipating security concerns in either Jerusalem or in the Palestinian controlled areas, the senior State official said there was no "imminent or particular threat" but that the safety of Americans overseas is the highest priority.
"The United States continues to take no position on final status issues, including boundaries or borders".
Palestinian officials cut ties with the U.S. after President Donald Trump recognised Jerusalem as Israel's capital a year ago and moved the American embassy to the city.
The decision has "a lot to do with pleasing an ideological U.S. team that is willing to disband the foundations of American foreign policy, and of the worldwide system, in order to reward Israeli violations and crimes", the Palestinians' chief negotiator Saeb Erekat said.
The Palestinians, who cut off almost all contacts with the Trump administration after it recognized Jerusalem as Israel's capital late previous year, meanwhile, quickly denounced it.
"The Trump Administration is part of the problem, not part of the solution", he added in a statement.
Despite the vote, the USA went ahead with the embassy transfer on May 14, triggering angry protests in Gaza, the West Bank and elsewhere in the world.
However, an examination of trade data between the US and Arab and Muslim states since President Donald Trump's announcement in December 2017 of his decision on this issue and subsequent move of the US Embassy to Jerusalem shows no evidence that the announcement had any negative effect on US trade with most Arab and Muslim countries.
He said the U.S. has effectively killed the two-state solution that envisioned an independent Palestinian state in the occupied West Bank and Gaza alongside Israel.
The administration in December recognized Jerusalem as Israel's capital, ending a decades-long USA position that the status of the city should be determined in negotiations.
In remarks to The New York Times, Daniel C. Kurtzer, an ex-envoy to Israel under Republican and Democratic administrations, said the Trump administration's decision regarding its mission for Palestinians in the occupied territories would certainly be counterproductive.
The closing of the consulate follows a series of punitive measures by Trump administration against the Palestinians and their leader, Mahmoud Abbas, in hopes of compelling them to participate in a US-led peace process.
Worldwide powers have for decades maintained separate and autonomous representations to Israel and the Palestinians on the basis of supporting the eventual creation of an independent Palestinian state. The Palestinians want the city as the capital of their future state.
The prime minister has played down concerns his comments about moving Australia's Israeli embassy to Jerusalem could affect trade relations with Indonesia. After that, a number of other countries also chose to consider the possibility.