Scoop: U.S. and Israel to form team to solve consulate dispute

• Biden told Bennett during their White House meeting in August that he will not abandon his plan to reopen the consulate in Jerusalem, setting up a major point of contention between the administrations.

Driving the news: Secretary of State Antony Blinken and Israeli Foreign Minister Yair Lapid discussed the consulate issue during their meeting in Washington last Wednesday.

• Lapid pushed back on the U.S. position, saying, “I don’t know how to hold this coalition together if you reopen the consulate," according to Israeli officials.
• Blinken said he understood the sensitive political situation and wants to start a dialogue to work toward a solution, the officials say.

What's next: Blinken proposed the formation of a small team including Lapid and himself along with one or two aides from each side to discuss the issue with maximum discretion.

• Lapid agreed but said he wants to hold off on such a dialogue until after the Israeli government passes a budget in the first week of November.

Between the lines: The issue is so politically charged because the U.S. would once again have separate missions for the Israelis and the Palestinians in Jerusalem. The Israelis believe that would infringe on their sovereignty in the city. For the Palestinians, it could strengthen their claim to part of Jerusalem.

• Asked after Lapid's visit about the possibility of the U.S. instead opening a consulate in the West Bank, a senior Israeli official responded favorably but said he couldn't say whether that was under consideration.

What they're saying: A spokesperson for Lapid said no team was formed yet, and he reiterated that Lapid had made his opposition to the reopening of the consulate clear in all of his meetings in Washington.

• A State Department spokesperson said, “We have nothing new for you on this issue at this time.”