JERUSALEM: The United States lowered the flag on Monday at the Jerusalem consulate that had served as its diplomatic channel to the Palestinians, merging the mission with the new US Embassy to Israel in the contested city.

Whereas previously the consulate reported on Palestinian matters directly to Washington, its staff have now been repurposed in the embassy as a `Palestinian Affairs Unit` under the US ambassador to Israel, David Friedman.

Israeli-Palestinian talks collapsed in 2014 and the White House says it intends to present a new peace plan after a national election in Israel in April.

Israel deems all of Jerusalem, including the eastern sector it captured in the 1967 Middle East War and annexed in a move not recognised internationally, as its undivided capital.

At the ornate consulate on Agron Street in downtown Jerusalem, the flag ceremony was kept low key under grey winter skies. Friedman, who helped spearhead May`s relocation of the US Embassy from Tel Aviv to a different converted consular building in south Jerusalem, was not present.

US of ficials said the Stars and Stripes banner was taken down and presented to departing consul Karen Sasahara as a farewell gift, in keeping with Foreign Service custom, af ter which another US flag was run up.

The US State Department said the merger was driven by operational efficiency and did not signal any change in policy.

`Our work and our team will continue to work on reaching peace in this land,` Sasahara said on YouTube.

US officials said last month that the Agron street building, immediately upon consulate operations ending, would serve as the ambassador`s official residence.

But that plan appeared to have slowed. On Monday, the consulate plaque had been removed from the building facade,leaving a blank space.

The US consulate in Jerusalem had dated back 175 years, to when the city was under Ottoman rule.-Reuters