Russia owns several plots in Jerusalem bought prior to Israel's creation in 1948, with Moscow recently claiming that a plot adjacent to one of those sites was also theirs.

Talks between Jerusalem city hall and Russia led to Israel recognising Moscow's ownership.

The Russian embassy in Israel said the "property will be used, in particular, for the construction of a complex of buildings and structures used for the needs of the branch office of the consular section".

The Israeli foreign ministry confirmed the deal, describing it as a "political success in strengthening Jerusalem's status by opening a branch of the Russian embassy in Jerusalem."

The agreement showed the success of Israel's "efforts to increase the number of diplomatic representations in Jerusalem, the capital of Israel," the ministry added.

Nearly all countries with diplomatic relations with Israel have their diplomatic missions in Tel Aviv, with the notable exception of the United States, which moved its embassy to Jerusalem in 2018 under the Donald Trump administration.

The status of Jerusalem is a key issue in the Israeli-Palestinian conflict.

Israel captured the city's eastern sector in the Six-Day War of 1967 and later unilaterally annexed it in a move not recognised by United Nations.

The Ramallah-based Palestinian Authority did not immediately comment on the Israeli-Russian deal.

Israel's ties with Russia have been strained since Moscow invaded Ukraine in February last year. Some 15 percent of its population are immigrants from the former Soviet Union.