Occupied Jerusalem - In a move likely to further strain relations between the United States and the Palestinian National Authority, the State Department announced Thursday that it will merge the diplomatic mission serving Palestinians with the US embassy in Israel.

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 US 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 US foreign policy by recognising occupied Jerusalem as Israel’s capital. In May, he moved the US embassy from Tel Aviv to occupied Jerusalem, angering Palestinians, who claim occupied East Jerusalem as the capital of their future state.

Since then, the State Department has cut back economic aid to the PNA and halted its financial contribution to the United Nations relief agency for Palestinian refugees. In addition, it has shuttered the Palestine Liberation Organisation’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 occupied 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 US diplomatic missions could pose further problems for Trump’s Middle East advisory team. Palestinian 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 colonies.

Announcing the new diplomatic framework Thursday, the State Department said it was merely a continuation of the embassy’s transition to occupied 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.