The United States has officially shuttered its consulate in Jerusalem and merged it with the US Embassy to Israel in the city, marking a significant downgrade to the status of the country’s main diplomatic mission in Palestine. The U.S. lowered the flag at the consulate today, Reuters reports.

“This decision was driven by our global efforts to increase the efficiency and effectiveness of our diplomatic engagements and operations,” State Department spokesperson Robert Palladino said in a statement.

Palladino added that the move “does not signal a change of US policy on Jerusalem, the West Bank, or the Gaza Strip.”

The move means that the consulate will stop acting as an independent diplomatic mission and Palestinians will now be forced to work with an entity that is subordinate to U.S. Ambassador to Israel David Friedman, a staunch supporter of the settlement movement.

Haaretz noted that the Jerusalem consulate’s previous work of submitting regular reports to the US administration about construction and other developments in West Bank settlements will now also be overseen by Friedman.

The US Consulate in Jerusalem has, for decades, acted as a de facto embassy for Palestinians from Jerusalem, Gaza, and the West Bank, providing them with US visa and passport services, and also as the main channel of communication between the US administration and the Palestinian leadership.

“There will be complete continuity of U.S. diplomatic activity and consular services during and after the merger,” Palladino said, adding that there will now be a Palestinian Affairs Unit under the command of the Embassy to serve Jerusalem Palestinians.

He made no mention of services for Palestinians from the West Bank and Gaza, who previously traveled on Israeli entry permits to the consulate in Jerusalem for services.

Palestinian officials have sharply criticized the move as another attempt by the Trump administration to undermine the Palestinian Authority (PA) and Palestinian claims to Jerusalem.

PLO Chief Negotiator Saeb Erekat described the move as “the last nail in the coffin” of the Trump administration as an arbiter of the peace process.

Senior PLO official Hanan Ashrawi said in a statement that the move was “not an administrative decision. It is an act of political assault on Palestinian rights and identity.”

“The Trump administration is intent on leaving no room for doubt about its hostility towards the Palestinian people and their inalienable rights, as well as its abject disregard for international law and its obligations under the law,” senior Palestinian official Hanan Ashrawi said in a statement.

Palladino maintained, “The United States continues to take no position on final status issues, including boundaries or borders.”

“The specific boundaries of Israeli sovereignty in Jerusalem are subject to final status negotiations between the parties,” he said.

Despite US assurances that old consular services will continue running as normal under new departments, some Palestinians and American citizens living in the occupied West Bank have expressed fears that the already lacking consular services will now be made even more difficult.

One Palestinian from the West Bank, who asked to remain anonymous, told Mondoweiss that he was forced to enter Jerusalem “illegally” in order to go to his US visa appointment after not receiving an Israeli entry permit.

“There are hundreds like me, who wait months just to get an appointment and then we also have to go through the obstacle of Israeli borders to get there,” he said. “I can only imagine that things will get much worse now.”

The downgrade is the latest in a more than year-long string of policies from the Trump administration aimed at further alienating Palestinians leading up to Trump’s widely anticipated “Deal of the Century,” which is supposed to be unveiled after Israel’s April elections.