The foreign secretary, ⁠Ed Miliband, has said Britain’s consulate general ⁠building in ⁠East Jerusalem ​will not be closing but will ⁠be known as a UK mission, remaining independent, operational ⁠and serving Palestinian people.

Israel had ​ordered the ‌British consulate ‌in East Jerusalem to close ‌on Thursday over the UK’s plans to impose sanctions on settlements in the West Bank.

Miliband said that having ‌withdrawn a number of staff and families in recent ​weeks, it would now work to build up its presence.

He said Britain would ⁠not take any reciprocal action ​against Israel ​while the ​two sides engaged in ​talks, ‌following speculation it ​could expel some Israeli diplomats from Britain.

Diplomats from other western countries had been worried about any closure setting a precedent, and suggested Britain had to respond strongly to the Israeli move because it had implications beyond the immediate dispute.

The consulate is separate from the UK embassy, based in Tel Aviv, and has a distinct diplomatic role, covering East Jerusalem, the rest of the West Bank and Gaza, where it provides consular services to Palestinians.

Israel had threatened to close it in protest at the UK’s decision to ban trade in goods from illegal Israeli settlements in the occupied West Bank. Israel’s foreign minister, Gideon Sa’ar, said Britain’s ‌decision to impose sanctions was “morally distorted” and accused the governing Labour party of being hostile towards his country.

The ‌incident has highlighted growing frustration among Israel’s longtime allies over its settlements in the occupied West Bank, viewed by much of the world as illegal under international law. In his statement to the UK parliament, Miliband said settler terrorists, supported by Netanyahu’s government, were committing ethnic cleansing in the West Bank. Israel disputes this.

The UK Foreign Office was advised informally by the former attorney general Dominic Grieve that Israel would be acting unlawfully if it closed the consulate on the basis it was sited in East Jerusalem, which is recognised by the United Nations and most of its members, including the UK, as being occupied Palestinian territory.

Israel has also said it will revoke the credentials of Dutch diplomats from the country’s mission to Palestine in response to the Netherlands’ ban on imports from illegal Israeli settlements. France and Canada, which joined the UK in the settlement trade ban, have not had action taken against them.

UK-Israeli relations have deteriorated steadily during the war in Gaza, prompted by Hamas’s 7 October 2023 massacre of Israelis, as Britain became increasingly critical of the way in which Netanyahu seemed prepared to tolerate the deaths of thousands of Palestinians in an effort to render Hamas inoperative, a task successive Westminster governments thought was unachievable through his methods.

The UK has rescinded a large number of arms export licences to Israel and Miliband has spoken of evidence of war crimes in Gaza. He has declined to accuse Israel of genocide on the grounds he believes this is a matter for international courts to determine.