Foreign Minister Gideon Saar announced the decision on Thursday, saying the consulate's sign had already been removed. Only seven British diplomats will be permitted to remain in the building under strict restrictions.

"We did not wish to reach this point, but the actions of the Labour government have led us here," Saar declared.

The Israeli government also announced additional measures targeting Britain's diplomatic and security activities.

These include removing British representatives from an international aid coordination centre for Gaza in Kiryat Gat and suspending British training activities for Palestinian Authority forces in the occupied West Bank.

Israel also imposed an entry ban on 12 British elected officials and other citizens.

"We are interested in good relations with all countries of the world, but any country that acts against Israel must know that there will be a price," Saar said.

"It will not benefit from it, but quite the contrary. The era of Israeli restraint has ended, both in the security realm and in the diplomatic realm," he concluded.

The measures follow Britain's decision in September to ban imports from Israeli settlements in the occupied West Bank.

London had previously imposed sanctions targeting settlement activity and restrictions on certain arms export licences to Israel.

British Foreign Secretary Ed Miliband rejected Israel's authority to shut the nearly 200-year-old consulate, which manages Britain's relations with Palestinians.

Miliband maintained that the diplomatic facility would continue operating under the name "UK Mission, Jerusalem".

However, some staff members and their families have been temporarily withdrawn over safety concerns.

Britain said it would not introduce retaliatory measures while discussions with Israel continue over the mission's future.

Israel previously imposed diplomatic restrictions on Norway and Spain after both countries recognised a Palestinian state in 2024.