Foreign Minister Gideon Sa’ar announced Thursday morning that the British Consulate in eastern Jerusalem has ceased operations.

He noted that the Consul General and 19 additional diplomats will end their assignments and leave Israel. The building that housed the consulate, which is owned by the British government, will continue to be used by a reduced staff of just seven diplomats.

According to the Foreign Minister, the staff will operate on a very limited basis, and the building will no longer serve as a consulate. At the same time, the two countries agreed to continue a dialogue in which each government will be able to raise issues of importance to it.

In London, the understandings were presented differently. British Foreign Secretary Ed Miliband maintained that the consulate would not be closed.

“Following discussions with the Government of Israel, our Consulate General building will not be closing, and will be known as the UK Mission, Jerusalem from today," Miliband stated.

“The UK Mission, Jerusalem is independent, operational, and will continue to deliver vital services and our work with the Palestinian people."

The British Foreign Secretary announced that his country would not take retaliatory measures at this stage as long as discussions with Israel continued.

“Without an understanding, we would not have the necessary assurances for the security and protections of our staff and premises. Accordingly, the UK has temporarily withdrawn a number of staff and families to ensure their safety and security," Miliband explained.

“We will work in the coming months to build back up our presence, and we will not take reciprocal action while such discussions are underway and credible."

The understandings come after Sa’ar announced four retaliatory measures against Britain last month: the removal of British representatives from the international aid coordination center for Gaza in Kiryat Gat, the termination of British activities to train Palestinian Authority forces in Judea and Samaria, a ban on entry to Israel for 12 British elected officials and other British citizens, and the closure of the consulate in eastern Jerusalem.

Sa’ar explained that the measures were taken in response to the Labour government's policies toward Israel.

Among the steps he cited were Britain's recognition of a Palestinian state, the resumption of funding for UNRWA, the suspension of defense export licenses to Israel, sanctions against Israeli ministers, individuals, and organizations, the suspension of negotiations on a free trade agreement, and the freezing of military dialogue and security cooperation.

Sa’ar also mentioned restrictions on Israel's official participation in an international defense equipment exhibition in Britain and the decision to prevent IDF officers from participating in a training program at the Royal College of Defence Studies.

According to Sa’ar, the latest step that led to the escalation was the British government's decision to advance additional sanctions against Jewish communities in Judea and Samaria and expand the suspension of defense export licenses to Israel.

“We believe in dialogue, and we will continue to believe in dialogue," Sa’ar said.

However, he added that Israel's policy toward measures taken against it has changed.

“Every country that acts against Israel must know that there will be a price."