A diplomatic crisis between the Israel regime and Britain has deepened after London imposed measures targeting illegal settlements in the occupied West Bank, prompting a dispute over the status of the British diplomatic mission in Al-Quds.

The Israel regime removed signs from the British Consulate building in Al-Quds after ordering changes to the mission’s status in response to Britain's sanctions against settlement activities. Workers removed the signs reading "British Consulate General" and the consular section, while the British flag remained on the building.

Britain, however, rejected the move and said the diplomatic presence would continue under the name UK Mission, Al-Quds. British Foreign Secretary Ed Miliband said London does not accept that the Israel regime has the legal authority to close the nearly 200-year-old consulate and stressed that the mission would continue providing services and maintaining work with the Palestinian people.

The Israel regime’s Foreign Minister Gideon Saar said the consul general and 20 British diplomats would end their assignments, while a limited number of diplomats would remain to continue operating from the building. Britain said some staff members and their families had been temporarily withdrawn for security reasons.

Settlement sanctions trigger diplomatic dispute

The dispute was triggered by Britain's measures against illegal settlements in the occupied West Bank.

London announced restrictions targeting trade with settlement areas and said further measures could be taken against individuals and organisations involved in settlement construction and financing.

Britain has also opposed the expansion of the E1 settlement project between Al-Quds and Maale Adumim, warning that such developments could further undermine the prospects for a two-state solution.

The Israel regime criticised Britain's measures, describing them as hostile steps, while London said the sanctions were aimed at settlement policies and not at the Israeli population.

Banks concerned over possible sanctions

The dispute has also created concerns among financial institutions in the Israel regime.

Reports said the Israel Banks Association warned that possible British sanctions could affect financial institutions involved in supporting or financing settlement construction.

Banks have reportedly become more cautious over providing financial guarantees for companies involved in settlement-related projects, including the E1 area, due to concerns about possible international restrictions.

The issue has increased pressure on businesses and financial institutions operating in areas linked to settlement expansion.

Nearly 200 years of British presence in Al-Quds

The British diplomatic presence in Al-Quds dates back nearly two centuries.

The consulate has traditionally handled Britain's relations with Palestinians in Al-Quds, the occupied West Bank and Gaza, as well as providing consular services.

The dispute does not affect the British Embassy in Tel Aviv, which continues to handle diplomatic relations with the Israel regime.

Growing tensions across Europe

The diplomatic dispute comes amid wider tensions between the Israel regime and several European countries over settlement expansion and developments in the occupied Palestinian territories.

European criticism of settlement policies has increasingly expanded into diplomatic, economic and political areas, with some governments considering measures targeting activities linked to settlements.

The developments have highlighted the growing international pressure surrounding settlement expansion and the status of diplomatic missions operating in Al-Quds.(ILKHA)