When questioned on the closure by reporters, State Department spokeswoman Heather Nauert went as far as to say: "I think we'd like for them to be able to keep it open."
"Shutting down an office -- that's not what we are talking about today. There are some conversations underway," she said.
Secretary of State Rex Tillerson was examining the issue, she said, insisting: "In our view, communications are not frozen.
"We're in contact with the Palestinians. As far as I'm aware, the offices" are "open and running right now."
US officials say that by calling for Israeli officials to be prosecuted at the International Criminal Court, Palestinian leaders have breached the terms of the arrangement.
The PLO reacted with fury and on Tuesday claimed to have broken off ties with the Americans -- imperilling President Donald Trump's stated goal of a negotiated Middle East peace deal.
But Nauert described the decision to close the mission as a "technical" one after Tillerson concluded that the PLO had not complied with conditions laid down by the US Congress.
"We are not giving up on the plan for peace. We are not doing that," Nauert said.
"I mean, you know how important that is to this administration, to Mr. Kushner and also to Jason Greenblatt as well.
"So we're continuing to push ahead for a comprehensive peace plan. The Israelis and the Palestinians have both said that they want that as well."
Nauert added that Tillerson had made his decision in close consultation with the White House, but added that discussions about the office in Washington continue.
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