British Prime Minister Liz Truss said she was mulling a move of her embassy from Tel Aviv to Jerusalem, British daily Telegraph reported late on Wednesday.
Truss met Prime Minister Yair Lapid on the sidelines of the UN General Assembly in New York.
Truss "understands the importance and sensitivity of the issue," he office said adding she hoped the move would be possible.
The new prime minister had already said she was considering the move, even before she was appointed to replace Boris Johnson at the help of the British government, and was considered a unique demonstration of support for Israel, after no other British leader had made similar statements.
Officials in Jerusalem believe the close relations with the UK will continue and grow under the leadership of Truss.
"She is very fond of the values that Israel stands for," the officials said. "She has been positive towards us and we expect her government to be the same," they said even before she was named Johnson's replacement.
Lapid congratulated Truss on her appointment. "He expressed his confidence that under her leadership, Israeli -UK relations will reach new heights," the Prime Minister's Office said in a statement.
"The two leaders also discussed the need to stand firm against Iran in negotiations for a return to the 2015 nuclear deal. Lapid said Israel was hoping for a new longer and stronger deal that would address all the threats posed by Iran," the PMO said.
Truss and Lapid had met when both served as their countries foreign ministers and in a letter the British prime minister had sent to the lobby supporting Israel in her Conservative Party last Novermber, she even described him as a close friend.
They co-wrote an editorial published in tandem in Ynet's sister publication Yedioth Ahronoth and in Britain's Telegraph newspaper, where they promised to work day and night to prevent Iran from becoming a nuclear state.
She had also said Britain would vote with Israel in the UN human rights council and had been true to her word.
Thus far, four embassies have relocated to Jerusalem while the rest remain in Tel Aviv.
Then president Donald Trump ordered the move of the U.S. embassy to the capital in 2017.