Paraguay says it will move its embassy in Israel back to Tel Aviv, reversing a May decision by former President Horacio Cartes to move the diplomatic site to Jerusalem al-Quds.
Luis Alberto Castiglioni, the South American country's foreign minister, made the announcement during a press briefing in the capital Asuncion on Wednesday.
"Paraguay wants to contribute to an intensification of regional diplomatic efforts to achieve a broad, fair and lasting peace in the Middle East," the top Paraguayan diplomat said.
Cartes had traveled to Israel to inaugurate the new embassy in May. His successor Mario Abdo, also a member of the conservative Colorado party, took office last month.
Palestinians had at the time condemned Paraguay for relocating its embassy to the holy city.
Paraguay had been among the first countries that agreed to transfer its embassy after US President Donald Trump on December 6 recognized Jerusalem al-Quds as Israel's "capital" in December, infuriating widespread international condemnation.
The move by Trump received negative reaction from almost all of Washington's allies, including the European Union, Britain, Germany and France.
In the hours leading up to the inauguration on May 14, Israeli troops engaged in clashes with Palestinians taking part in mass protests on the Gaza border. According to Gaza health officials, at least 58 Palestinians were shot dead and hundreds wounded by Israeli snipers who are positioned along the fence, facing the protesters.