El Salvador's foreign ministry said on Friday that the country will move its embassy in Israel from Jerusalem to Tel Aviv, reports said.
El Salvador's decision to move its embassy came one week after another Central American nation, Costa Rica, announced it was moving its diplomatic mission to Tel Aviv, which is used by other countries because of Jerusalem's controversial status.
Costa Rica is the only other country that had an embassy in Jerusalem.
"With the decision announced today, El Salvador seeks to contribute through diplomatic means to peace between all the parties involved," the Salvadorian Foreign Ministry said in a press statement.
The Salvadorian government will continue to denounce terrorism and support initiatives "that recognize and guarantee the right of Israel to exist and live in peace within internationally-recognized borders," it said.
El Salvador's foreign ministry said its decision had been made in consultation with Israel. It was not clear yet when the move would take place.
Israel regards Jerusalem as its "undivided and eternal capital" despite a lack of international recognition.
The Jewish state captured the eastern part of Jerusalem in the 1967 Middle East war and annexed it afterward. About 200,000 Arab residents live in East Jerusalem.
Palestine asserts that East Jerusalem is part of its territory and it wants it as its future capital.