US and Israel agree $1 lease for permanent Jerusalem embassy
The deal allocates land in West Jerusalem for a permanent US embassy, replacing the temporary site opened during Donald Trump’s first term.
By Daniel Okafor · Business Editor
2 min read
The United States and Israel have signed a $1 lease agreement for land in West Jerusalem where Washington plans to build a permanent embassy, Al Jazeera reported. The deal matters because it further anchors the US diplomatic presence in Jerusalem, a city central to Israeli-Palestinian claims.
Al Jazeera reported that the agreement follows the establishment of a temporary US embassy during President Donald Trump’s first term in office. The new arrangement allocates land for a permanent facility rather than continuing with the temporary setup.
An Associated Press photo caption identified Israeli Foreign Minister Gideon Sa’ar and US Ambassador Mike Huckabee at a ceremony in Jerusalem on Wednesday, July 1, 2026. The caption said the two officials held a symbolic one-dollar bill representing the lease price for the land.
Political significance
Al Jazeera described the move as another setback for hopes that Palestinians could one day have a capital in Jerusalem. The report specifically placed the planned permanent embassy in West Jerusalem.
The embassy issue has carried political weight since the temporary site was established during Trump’s first administration, according to Al Jazeera. By signing a lease for a permanent building, the US and Israel are turning that arrangement into a longer-term diplomatic commitment.
The report did not give further details on the planned embassy’s design, opening date or construction schedule. It also did not describe any Palestinian response to the lease signing.
This story draws on original reporting from Al Jazeera.