The move was made after the establishment of diplomatic ties with Israel on February 1 and a Kosovo/Serbia summit held at the White House in September, a statement said on Sunday.

"The ministry of foreign affairs and diaspora announces that the Kosovo Embassy in the State of Israel, with headquarters in Jerusalem, officially has been opened," it read.

Palestinians claim east Jerusalem, captured by Israel in the 1967 Middle East war and later annexed, as the capital of a future state.

Most of the international community does not recognise the Israeli annexation of east Jerusalem and says the competing claims to the city should be resolved through negotiations. Most international embassies are in Tel Aviv.

Kosovo becomes the first European country and Muslim-majority one to establish its embassy in Jerusalem, following the US and Guatemala.

Kosovo's decision was taken when outgoing prime minister Avdullah Hoti met with Serb president Aleksandar Vucic at the White House in September with then-president Donald Trump.

"Setting of the plaques and the state flag at the Kosovo Embassy in Israel reflects the government of Kosovo's commitment to comply with the pledge for establishing the diplomatic mission to Jerusalem," it said.

Albin Kurti, prime minister-designate, has found himself in a difficult diplomatic position ahead of taking up his post after pressure from Turkey, a close ally of the new Western Balkan country, to change its mind about the Jerusalem location.

"The place where the embassy will be located is to be considered following checking of the documentation of the outgoing government," Kurti has said.

Turkish president Recep Tayyip Erdogan has warned Kosovo that the move could damage future relations with his country.

Australian Associated Press