Honduran President Juan Orlando Hernandez will travel to Israel on Friday to inaugurate a "diplomatic office" in Jerusalem, recognizing the holy city as Israel's capital.
The diplomatic office in the city will be an extension of Honduras' Tel Aviv-based embassy.
"For me it's the recognition that Jerusalem is the capital of Israel," Hernandez said on Tuesday.
The foreign ministry said in a statement Israel had proposed that Honduras move its embassy to Jerusalem, which is being "analyzed and evaluated in the international and national context."
Relations between Washington and the PA last year saw a deterioration when the United States moved its embassy to Jerusalem.
Guatemala and Paraguay followed suit while Brazil said it was studying the possibility. Paraguay reversed its decision after just four months.