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The head of the consulate, which traditionally dealt with Palestinian affairs, will return to Washington, a State Department spokesman told The Washington Post. Instead, Ambassador to Israel David Friedman will oversee U.S. diplomatic ties with the Palestinians.
The merger is just the latest step by the Trump administration that appears to downgrade its diplomatic relations with the Palestinians.
In December, President Trump upended decades of U.S. foreign policy by recognizing Jerusalem as Israel's capital.
In May, he moved the U.S. Embassy from Tel Aviv to Jerusalem, angering Palestinians, who claim east Jerusalem as the capital of their future state.
Since then, the State Department has cut back economic aid to the Palestinian Authority and halted its financial contribution to the United Nations relief agency for Palestinian refugees. In addition, it has shuttered the Palestine Liberation Organization's diplomatic mission in Washington, revoking the visas of all Palestinian representatives.
The Palestinians accuse the Trump administration of siding with Israel and since the Jerusalem announcement have refused to meet with Jared Kushner and Jason Greenblatt, the White House's point men on Israeli-Palestinian issues. The two say, however, that they are close to formulating an innovative peace plan to end the decades-old Israeli-Palestinian conflict.
Merging the two U.S. diplomatic missions could pose further problems for Trump's Middle East advisory team. Palestinian Authority President Mahmoud Abbas has made no secret of his disdain for Friedman, a former real estate lawyer who is known to have provided financial support to Israeli settlements.
In a March speech, Abbas even referred to Friedman as a settler and a son of a dog.
Announcing the new diplomatic framework Thursday, the State Department said it was merely a continuation of the embassy's transition to Jerusalem and is aimed at streamlining operations in the region. It said that a new Palestinian Affairs Unit would operate from inside the embassy and that there would be no changes to general consular services.
"This decision is driven by our global efforts to improve the efficiency and effectiveness of our operations. It does not signal a change of U.S. policy on Jerusalem, the West Bank, or the Gaza Strip," the statement said.
A State Department official in Jerusalem, speaking on the condition of anonymity to brief the press, said, however, that the current consul general, Karen Sasahara, would return to Washington.
"She is not resigning," the official said. "She has an excellent relationship with Ambassador Friedman, but following the merger of the consulate and the embassy, her role will be eliminated."
Saeb Erekat, the secretary general of the PLO, condemned the U.S. move. "The US decision to end the existence of the US Consulate . . . has nothing to do with 'efficiency' and a lot to do with pleasing an ideological US team that is willing to disband the foundations of American Foreign Policy, and of the international system, in order to reward Israeli violations and crimes," he said in a statement.
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