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The US consulate in Jerusalem, which serves Palestinians, will be absorbed into the new US Embassy to Israel on Monday, the State Department said, a planned merger that has angered Palestinian leadership.

The Executive Committee of the Palestine Liberation Organization (PLO) strongly criticized today the United States decision to close its consulate in Jerusalem and merge it with its newly opened embassy in the holy city, saying that with this move, the U.S. is acting against global law and conventions.

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

President Donald Trump is preparing to unveil a long-awaited Middle East peace plan, but Palestinian officials have refused to engage with his envoys since his controversial decision in December 2017 to recognise Jerusalem as Israel's capital and relocate the U.S. embassy to the city from Tel Aviv.

"On the basis of Israel's continued contacts with us, we agreed with the Palestinian leadership on a meeting hosted by Russian Federation to discuss the peace process without preconditions", Lavrov told reporters.

"Malaysia wishes to reiterate its deeply held view that the best resolution to the ongoing conflict is through the two-state solution based on the pre-1967 borders with the Palestinians and Israelis living side by side in peace, and with East Jerusalem as the capital of Palestine", it said. Israeli-Palestinian peace talks collapsed in 2014.

"The U.S. administration is subsuming Palestine under Israel and aligning itself with the racist Israeli right, which negates Palestinian identity, history, narrative, and national rights", he said.

Palestinian youths attempted to defend the home from seizure, however, Israeli police forces assaulted them and fired tear-gas bombs towards them.

In December 2017, United Nations member states voted decisively at the General Assembly in favour of a resolution effectively declaring USA recognition of Jerusalem as Israel's capital to be "null and void" and demanding it be cancelled.

While Palestinians point to Israeli policies such as settlement building and its continuing occupation as gradually destroying the two-state solution, Israel argues it has no partner for peace and points to Palestinian violence.

Hanna Issa, secretary-general of the Islamic-Christian Commission to Support Jerusalem and the Holy Sites, told Arab News that the lowering of American diplomatic representation to Palestine was a continuation of discriminatory USA policy.

"What does he (Lapid) mean by a state?" asked Wasel Abu Youssef, an official in the umbrella Palestine Liberation Organization.

The Trump Administration has taken several steps over the previous year that many interpret as favoring Israel over the Palestinians. All U.S. Presidents until Trump understood its importance as our bridge to the Palestinian people.

Any credible peace effort must put the Palestinians and the Israelis at the negotiating table and apply equal pressure on both sides, not work with some outside parties who are mainly included for their potential to pay the financial bill of an uncertain deal that most clearly will fail to recognise legitimate Palestinian rights.