WASHINGTON—The State Department will open its embassy in Jerusalem in May and is entertaining an unusual offer from Sheldon Adelson, Republican Party donor and casino magnate, to help pay for a new facility after an initial move from Tel Aviv, U.S. officials said.
Secretary of State Rex Tillerson late Thursday signed off on security plans for converting a consular facility in Jerusalem’s Arnona neighborhood. Officials said they are eyeing a ribbon-cutting ceremony on May 14 to coincide with the 70th anniversary of Israel’s declaring independence.
“We are excited about taking this historic step, and look forward with anticipation to the May opening,” State Department spokeswoman Heather Nauert said.
At first, David Friedman, U.S. ambassador to Israel, and a small group of aides will begin working from the facility. Next, the State Department will begin retrofitting that complex to accommodate more officials, and the department has begun efforts to plan and locate a site for a new embassy facility in Jerusalem. Mr. Adelson has offered to contribute to the effort to build a new embassy, but the discussions are informal so far.
State Department officials are examining whether the U.S. could accept such a gift. Mr. Adelson’s offer was earlier reported by the Associated Press. A representative to Mr. Adelson didn’t immediately respond to a request for comment.
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Mr. Adelson has also engaged with President Donald Trump and his administration on acquiring land for the construction of a new embassy in Jerusalem, according to a person familiar with the matter. State Department officials said that process could take at least five to seven years.
The embassy move and Mr. Adelson’s unconventional offer come amid an effort by Mr. Trump’s son-in-law, Jared Kushner, and Mr. Trump’s chief negotiator, Jason Greenblatt, to try to restart the Middle East peace process between Israel and Palestinians. The offer of Mr. Adelson’s gift could complicate those efforts as Mr. Adelson is a staunch supporter of Israel’s Prime Minister Benjamin Netanyahu and funds Israel Hayom, a pro-Netanyahu newspaper in Israel.
At the United Nations this week, diplomats pressed Messrs. Kushner and Greenblatt on whether their plan would be biased toward Israel. They responded that they have spent months meeting with Palestinians, Israelis and others in the region to ensure evenhandedness.
Trump administration officials and Palestinian leadership haven’t spoken since December, when Mr. Trump recognized Jerusalem as Israel’s capital.
Mr. Trump addressed the embassy during a speech Friday at a conference of conservative activists, calling recognizing Jerusalem as Israel’s capital “the right thing to do,” even as he was pressured not to follow through on what had been a campaign pledge.
Efforts to convert the Jerusalem facility or eventually build a new embassy are likely to cost hundreds of millions of dollars, and Mr. Adelson’s offer could offset some of the costs, though it isn’t clear whether private citizens have ever helped to fund embassies before. Mr. Trump has been publicly critical of the steep price tag of the U.S. embassy in London, which cost about $1 billion to build but was financed through the sale of other American properties in the U.K.
The department’s foreign-affairs manual gives guidance on how the State Department should treat gifts from private citizens, including weighing whether accepting would be a conflict of interest. The guidance says the U.S. considers the gifts on a case-by-case basis and takes care to avoid the appearance of a conflict.
The U.S. has maintained diplomatic representation in Jerusalem since the 19th century, and its consulate general there has remained administratively separate from the American embassy that opened in Tel Aviv after Israel declared independence on May 14, 1948.
Shortly before the official announcement in Washington, the U.S. consul general in Jerusalem, Donald Blome, relayed the plans to about 200 employees in a series of town halls held back-to-back at three separate facilities under his oversight. The opening largely will be symbolic, with fewer than half a dozen desks assigned to the embassy, staff were told. A second phase will involve new construction, including secure space for classified materials and meetings, that will expand the embassy footprint to 15 desks; plans for the final phase in relocating the embassy, which will involve significantly expanded facilities, remain unclear.
Officials at the consulate general in Jerusalem, housed on Agron Road, will continue to focus on Palestinian issues, State Department officials said.
Mr. Trump is expected to meet with Mr. Netanyahu at the White House on March 5, officials said. Mr. Netanyahu will be in Washington to attend the American Israel Public Affairs Committee’s annual conference.
—Jess Bravin and Rebecca Ballhaus contributed to this article.
Write to Felicia Schwartz at Felicia.Schwartz@wsj.com
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