PRISTINA: Kosovo said Sunday it had officially opened its embassy in occupied Jerusalem after becoming the first Muslim-majority territory to recognise the city as Israel's capital.

The move was in exchange for Israel recognising Kosovo, a major victory for Pristina's efforts to gain full global recognition of the independence it declared in 2008 following a war with Serbia in the 1990s.

The new embassy was opened during a brief ceremony during which Kosovo's flag was raised in front of the building in occupied Jerusalem, the Kosovo foreign ministry said in a statement.

Serbia has refused to acknowledge the independence of its former province, so while Kosovo has now been recognised by much of the Western world, its rejection by Belgrade's key allies Russia and China has locked it out of the United Nations.

Israel had been another key holdout until last month, when it established diplomatic ties with Kosovo.

In exchange, Kosovo followed the lead of former US president Donald Trump by recognising occupied Jerusalem as the Jewish state's capital. Trump had discussed the Israel-Kosovo deal in Washington during economic talks with Serbia and Kosovo in September.