Workers removed signs and plaques from the British consulate building in East Jerusalem overnight from Wednesday to Thursday, shortly before the deadline set by Israel for its closure expired, in a development that has heightened diplomatic tensions between London and Tel Aviv. The move comes as Israeli banks fear they could face anticipated British sanctions over the role of financial institutions in financing settlement expansion in the West Bank.
Israel orders consulate to close within 30 days
Israel ordered Britain last month to close the consulate within 30 days and remove the diplomats working there from the city. The decision followed London’s announcement of sanctions targeting Israeli settlements in the West Bank, including a trade ban on goods manufactured there.
Journalists saw consulate workers removing a sign bearing the name “British Consulate General”, along with another sign indicating the consular section, while the British flag remained flying above the building. The consulate did not immediately comment on the removal of the signs or the status of its operations after the deadline.
Israel has stood by its decision to close the consulate despite British efforts to keep it open. Those efforts included sending Jonathan Powell, Britain’s most senior national security adviser, to Israel last week for undisclosed talks about the crisis. The British presence in Jerusalem dates back nearly 200 years, long before the establishment of Israel in 1948.
The consulate’s role and location in East Jerusalem
The closure order does not apply to the British embassy in Tel Aviv, which manages official diplomatic relations between the United Kingdom and the Israeli government. The British consulate is located in the Sheikh Jarrah neighbourhood of East Jerusalem and manages Britain’s relations with Palestinians in Jerusalem, the West Bank and the Gaza Strip, while also providing consular services to Palestinians.
Sources said the closure decision affects about 30 British diplomats, as well as their family members. The British Foreign Office on Wednesday declined to clarify whether the consulate was still operating or whether any of the British diplomats working there had returned to the United Kingdom.
Britain considers expelling Israeli diplomats
Britain is considering expelling diplomats from Israel’s embassy in the United Kingdom in response to the consulate’s closure and its staff being forced to leave Jerusalem, Reuters reported on Tuesday, citing sources. The Jerusalem Post quoted two informed sources as saying senior British officials had told the Israeli side that London could respond by expelling 27 Israeli diplomats and their families if the consulate were closed and British diplomats removed from it.
The Guardian reported that the British threat was based on the principle of expelling one Israeli diplomat for every British diplomat forced to leave, which could raise the number of Israeli diplomats covered by the measure to 27.
An exchange of expulsions would be a rare step in relations between the two sides, which, despite the current tensions, remain close partners in the economic, security and intelligence fields. Britain’s announcement of sanctions and Israel’s decision to close the consulate mark a new stage in the deterioration of relations over the past three years.
Britain has repeatedly criticised Israel’s actions during the Gaza war, as well as attacks by Israeli settlers on Palestinians in the West Bank. In turn, the government of Israeli Prime Minister Benjamin Netanyahu accuses Britain’s governing Labour Party of taking a hostile stance towards Israel.
Banking warnings over sanctions on settlement financing
In parallel with the diplomatic crisis, the Israeli Banks Association prepared an assessment warning that Israeli financial institutions could be affected by anticipated British sanctions, Haaretz reported. The measures could cover entities involved in or financing construction in settlements, rather than being limited to those involved in violence carried out by settlers.
Israeli banks are currently refusing to clarify whether they will provide guarantees to contractors seeking to participate in government tenders for construction in the E1 settlement project, located between Jerusalem and the settlement of Ma’ale Adumim, amid Western warnings against participation in the project. The E1 project lies east of Jerusalem and aims to link Ma’ale Adumim to the city through the confiscation of Palestinian land.
Its implementation would separate East Jerusalem from the West Bank. On 8 September, 12 countries, including Britain, France, Spain and Canada, announced their intention to ban trade with Israeli settlements built on Palestinian land. At the same time, British Foreign Secretary Ed Miliband announced that his country intended to expand its sanctions regime to include entities and individuals involved in building or financing settlements.
Representatives of the Israeli Banks Association held meetings with officials at Israel’s Foreign Ministry, the Bank of Israel and the Ministry of Strategic Affairs to present their concerns about the potential repercussions of the sanctions. The association believes that, if approved, the sanctions could affect financial institutions linked to settlement expansion.
They could also prompt international financial institutions to intensify scrutiny of transactions connected to these activities even before the British legislation takes effect. On 27 September, Israel’s Attorney General Gali Baharav-Miara decided to postpone the deadline for submitting bids in a tender to build the E1 project by one month, with the remaining procedures not to be completed until after the Knesset elections.
Official Palestinian figures indicate that about 750,000 settlers live in 194 settlements and 400 settlement outposts in the West Bank, including East Jerusalem.
