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The new government of Paraguay has announced the return of its embassy in Israel to Tel Aviv, just three months after its transfer to Jerusalem.
President Mario Abdo Benítez, who was sworn in last month, said he wanted to contribute to "a just and lasting peace" in the Middle East.
In response, Israel said it would close the Israeli embassy in Paraguay.
However, the Palestinian Authority said it would "immediately" open an embassy in the country of South America.
Israeli Prime Minister Benjamin Netanyahu said Paraguay's decision cast a shadow over relations between the two countries.
Why all travel?
Former Paraguayan leader Horacio Cartes decided to move the embassy to Israel in May, shortly after US President Donald Trump did the same.
Mr. Abdo Benítez was president-elect at the time and made it clear that he did not agree with the decision.
Mr. Trump unveiled the new US position in December 2017, declaring that he recognized Jerusalem as the capital of Israel.
He stated that he "felt that this course of action was in the best interests of the United States of America and in the pursuit of peace between Israel and the Palestinians".
Guatemala then confirmed that it would also visit Jerusalem and that the Czech Republic has reopened its honorary consulate in the city.
Why is the status of Jerusalem so controversial?
Because it goes to the heart of the Israeli-Palestinian conflict.
Trump's decision to recognize Jerusalem as the capital of Israel and to move the US embassy was denounced by the Palestinians, who said that this showed that the United States could not be a neutral mediator .
The UN Member States also voted decisively in the General Assembly for a resolution effectively calling for the US declaration "null and void" and demanding its cancellation.
Israel views Jerusalem as its "eternal and undivided" capital, while Palestinians claim that East Jerusalem – occupied by Israel in the 1967 Middle East war – is the capital of a future state.
- How the world reacted to Trump's decision on Jerusalem
Israeli sovereignty over Jerusalem has never been recognized internationally and, according to the 1993 Israeli-Palestinian peace accords, the final status of Jerusalem must be discussed in the final stages of peace talks.
Since 1967, Israel has built a dozen settlements, home to about 200,000 Jews, in East Jerusalem. These are considered illegal under international law, although Israel disputes this.