Israel and Britain reached an awkward compromise on Thursday over the British consulate in East Jerusalem, a post that has handled the UK's dealings with Palestinians for close to two centuries. Each side is describing the outcome very differently.

How it got here

On Sept. 8, Britain banned trade with Israeli settlements in the occupied West Bank, which the United Nations and much of the world consider illegal. Israel answered by saying it would close the consulate within 30 days, setting Thursday as the deadline, the BBC reported. The AP called the dispute the biggest diplomatic friction between the two close allies in decades.

Israel's version

Israeli Foreign Minister Gideon Saar wrote on social media that the consulate was "closing its operations today" and that its sign had been taken down. Under the principles agreed with London, he said, the consul general and 20 diplomats in all will end their duties and leave Israel. He acknowledged the building belongs to the British government and said Israel had authorized a task force of seven diplomats to work there "with a very limited scope of activity." He also wrote, "We did not want it to come to this."

Britain's version

Foreign Secretary Ed Miliband said Israel has no legal right to close a consulate that has been in Jerusalem for nearly 200 years, and repeated the UK's position that East Jerusalem is occupied territory. In a government statement, he said the building "will not be closing" and is now called the UK Mission, Jerusalem, which he described as independent, operational and still delivering services and working with Palestinians.

Miliband said that without an understanding on the security of staff and premises, Britain had temporarily withdrawn a number of staff and families, and that it would work to rebuild its presence in the coming months. He said the UK would not take reciprocal action while discussions are "underway and credible." Israeli media had reported that London was weighing expelling Israeli diplomats, according to the BBC.

The BBC noted that the British flag was still flying outside on Thursday morning and that staff were seen going in. Foreign Office minister Stephen Doughty, asked on the BBC's Today program whether the deal was a political fudge, said the name had changed but "crucially our presence remains."

What's next

The consulate, established in 1838, is separate from the British Embassy in Tel Aviv, the UK's main diplomatic link with Israel. The BBC said any British retaliation looks unlikely before Israel's elections later this month.