Israel said Thursday it was revoking the diplomatic status of Norway's envoys to the Palestinian Authority, accusing Oslo of "anti-Israel behaviour" during the Gaza war and drawing a formal protest.
The United States said the Israeli move was unhelpful given Norway's history as the facilitator of the secret negotiations with the Palestinians which led to the Oslo Accords of the 1990s.
Israeli Foreign Minister Israel Katz said he "ordered the termination of any representation on behalf of the Norwegian embassy in Israel vis-a-vis the Palestinian Authority", which has limited powers in urban areas of the Israeli-occupied West Bank.
"There is a price for anti-Israel behaviour," Katz added in a statement, citing Norway's recent recognition of a Palestinian state and backing of a pending International Criminal Court case implicating Israeli leaders in alleged war crimes and crimes against humanity in Gaza.
Norway accused the hard-right government of Prime Minister Benjamin Netanyahu of adopting an "extreme" response.
"This is an extreme action that first and foremost affects our ability to help the Palestinian population", Foreign Minister Espen Barth Eide said in a statement.
"Today's decision will have consequences for our relationship with the Netanyahu government," he added.
Barth Eide later called in Israeli charge d'affaires Yana Kotlyar-Gal to hear a formal protest.
"A short while ago, I summoned Israel's representative to Norway and met her at the foreign ministry to protest against this decision," the minister told journalists.
The Palestinian Authority accused Israel of resorting to "baseless pretexts" to put pressure on any government that tries to halt "violations against our people".
A statement from its foreign ministry expressed "condemnation and strong disapproval of the decision by the (Israeli) occupation authorities to restrict the work of Norwegian diplomats operating in the occupied State of Palestine, including Jerusalem".
It also expressed "rejection and disapproval of Israel's attempts to create baseless pretexts to pressure countries and international institutions that support our people and contribute to diplomatic and legal pressure on the occupying power to halt its crimes and violations against our people".
US State Department spokesman Matthew Miller criticised the Israeli move.
"Norway has a long history of playing a productive role when it comes to engaging with the government of Israel engaging with the Palestinian Authority," he told reporters.
"We don't think steps to prevent them from playing that role are particularly helpful," he added.
The Israeli foreign ministry accused Norway of "one-sided policies and statements" since the October 7 attack on Israel by Hamas that sparked the war in Gaza.
In May, Israel ordered Spain's consulate in Jerusalem to stop offering consular services to Palestinians from the occupied West Bank from June 1, a "punitive" measure for Madrid's recognition of a Palestinian state, Katz said at the time.
Spain, Ireland and Norway had earlier announced their decision to recognise a Palestinian state, which Israel's government opposes.
The move by the three countries brought to 146 the number of UN member states recognising a Palestinian state.
On August 5, Norway said the International Criminal Court had jurisdiction over Palestinian territories and that it should go ahead with proceedings in its case for arrest warrants against Israeli and Hamas leaders over the Gaza war.
In June, Norway announced it would increase its funding to the UN agency for Palestinian refugees (UNRWA) by 100 million kroner ($9.3 million).
Norway hosted secret Israeli-Palestinian talks in the Norwegian capital that led to the first Oslo Accord signed in Washington in 1993.
The agreements established a limited degree of Palestinian self-rule, and were intended as an interim measure that would lead to Palestinian statehood, but talks tapered off.
Foreign leaders have warned that the expansion of Israeli settlements, which are illegal under international law, threatens the viability of a Palestinian state.