The United States Consulate in Jerusalem, which served as a de facto embassy for Palestinians, officially closed its doors in Jerusalem on Monday and will be merged into the U.S. Embassy to Israel, officials said.

The announcement from the State Department came early Monday in Jerusalem, the merger effective that day. Now, outreach for Palestinians will be handled by a Palestinian affairs unit at the embassy.

"This decision was driven by our global efforts to increase the efficiency and effectiveness of our diplomatic engagements and operations," State Department spokesman Robert Palladino said in a statement. "It does not signal a change of U.S. policy on Jerusalem, the West Bank or the Gaza Strip."

In a farewell video addressed to the consulate's Palestinian partners, Consul General Karen Sasahara, who is leaving her post as the unofficial U.S. ambassador to the Palestinians and will not be replaced, maintains that the new Palestinian unit at the embassy will carry forward the mission of the consulate, "in support of the strengthening of American-Palestinian ties, to boost economic opportunities for the Palestinians and facilitate cultural and educational exchanges."

The decision to create a single diplomatic mission in Jerusalem was announced last October by Secretary of State Mike Pompeo. It raised Palestinians’ fears that the Trump administration was downgrading the handling of their concerns in the disputed city of Jerusalem, home to sites holy to JudaismIslam, and Christianity.

The move also fueled suspicions that the U.S. was recognizing Israeli control over east Jerusalem and the West Bank, territories that Palestinians seek for a future state.

Last year the U.S. recognized Jerusalem as Israel's capital and relocated its embassy there, upending U.S. policy toward one of the most explosive issues of the Israeli-Palestinian conflict. The Palestinians, in turn, cut off most ties with the administration.

The administration also has slashed hundreds of millions of dollars in humanitarian aid to the Palestinians, including assistance to hospitals and peace-building programs. It has cut funding to the U.N. agency that provides aid to Palestinians classified as refugees. Last fall, it shut down the Palestinian diplomatic mission in Washington.

The Trump administration has cited the reluctance of Palestinian leaders to enter peace negotiations with Israel as the reason for such punitive measures, although the U.S. has yet to present its much-anticipated but still mysterious "Deal of the Century" to resolve the Israeli-Palestinian conflict.