Israel and Kosovo established diplomatic ties on Monday, with the Muslim-majority territory recognising Jerusalem as the Jewish state's capital, putting it at odds with the rest of the Islamic world.

In a ceremony held over Zoom in Jerusalem and Pristina, Israeli Foreign Minister Gabi Ashkenazi and his counterpart from Kosovo Meliza Haradinaj Stublla signed a joint declaration establishing ties.

Ashkenazi said he had approved Kosovo's "formal request to open an embassy in Jerusalem."

Israel last year inked a series of deals brokered by former US president Donald Trump to establish diplomatic relations with Arab states, including the United Arab Emirates, Bahrain, Morocco and Sudan. 

Those agreements, known collectively as the Abraham Accords, triggered criticism in many majority-Muslim countries.

But the Arab parties to the Abraham Accords have all maintained that their diplomatic missions in Israel will be in Tel Aviv.

That position is in line with global consensus against recognising Jerusalem as Israel's capital until the Palestinian conflict is resolved. 

In September, Trump announced at a summit originally organised to strike a deal between Kosovo and its former war foe Serbia that Kosovo and the Jewish state would establish diplomatic ties.

But the most eye-catching part of the summit was an announcement by Kosovo that it would mutually recognise Israel, and Serbia saying it would follow Washington's lead in moving its embassy to Jerusalem.

So far, however, Serbia has failed to honour its pledge, with some officials claiming the deal was non-binding.

Kosovo also said it was ready to set up its Israel mission in Jerusalem, in exchange for Israel's recognition, as it seeks to further legitimise its 2008 declaration of independence from Serbia and statehood.