WASHINGTON (Reuters) - The United States will merge the U.S. Consulate General, which serves Palestinians, with its new embassy in Israel into a single diplomatic mission in Jerusalem, Secretary of State Mike Pompeo said on Thursday, drawing a quick rebuke from Palestinians.

Slideshow ( 4 images )

“This decision is driven by our global efforts to improve the efficiency and effectiveness of our operations,” Pompeo said in a statement. “It does not signal a change of U.S. policy on Jerusalem, the West Bank or the Gaza Strip.”

U.S. President Donald Trump outraged the Arab world and stoked international concern by recognizing Jerusalem as Israel’s capital in December and moving the U.S. Embassy from Tel Aviv to Jerusalem in May.

The consulate general in Jerusalem is the top mission for Palestinians, who want East Jerusalem for their capital.

Pompeo said the United States will establish a new Palestinian Affairs Unit inside the embassy in Jerusalem to continue reporting, outreach and programming in the West Bank and Gaza as well as with Palestinians in Jerusalem.

Senior Palestinian leader Saeb Erekat denounced the decision to eliminate the consulate as the latest evidence the Trump administration is working with Israel to impose a “Greater Israel” rather than a two-state solution.

The decision has nothing to do with efficiency, Erekat said, “and a lot to do with pleasing an ideological U.S. team that is willing to disband the foundations of American foreign policy, and of the international system, in order to reward Israeli violations and crimes.”

Pompeo said the Trump administration was committed to a peace effort between Israel and the Palestinians.

Palestinian leaders suspended ties with the U.S. administration after the embassy move and have thus had no official contacts with the consulate in Jerusalem.

The status of Jerusalem is one of the thorniest disputes between Israel and the Palestinians and Palestinian leaders accused Trump of sowing instability by overturning decades of U.S. policy.

Palestinians, with broad international backing, seek East Jerusalem as the capital of a state they want to establish in the occupied West Bank and the Gaza Strip.

Israel regards all of the city, including the eastern sector it captured in the 1967 Middle East war and annexed, as its “eternal and indivisible capital,” but that is not recognized internationally. The Trump administration has avoided that description, and noted that the city’s final borders should be decided by the parties.