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All Israeli embassies and consulates around the world shut down early Wednesday as diplomats and military attaches went on strike over a long-simmering dispute with the Finance Ministry over expense stipends paid to envoys.

The move, coordinated by the Foreign Ministry, the Defense Ministry and the Histadrut Labor Federation, comes after the treasury reportedly backtracked on previous understandings and said it would force the envoys to pay back thousands of dollars that they had been reimbursed for expenses, according to The Times of Israel.

"Due to the decision of the Israeli Ministry of Finance to breach understandings that were agreed upon and signed by the Director General of the Ministry of Finance on July 21, 2019, and to apply a one-sided procedure that alters a protocol that has been in place for several decades, we are forced to close the Embassy," said statements posted on various mission websites.

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"No consular services will be provided and no one will be allowed to enter the Embassy/Consulate," the statement said.

The closures were likely to harm Israelis traveling abroad and in need of consular assistance for issues like lost passports or medical emergencies. The Defense Ministry stoppages would harm Israel's defense cooperation with other countries and arms exports.

The dispute is over expense stipends paid to Israeli diplomats and Defense Ministry envoys stationed abroad that are meant to cover a wide array of expenses, from hosting events at an ambassador's residence to transport costs.

The Treasury has been pushing to change the way it reimburses the costs and tax the stipends, which would significantly hit the diplomats and attaches, who have long-complained about low salaries.

It now also wants to impose the new system retroactively, which would force the envoys to repay thousands of dollars.

"Israeli diplomats are committed at all times to strive to enhance Israel's strength and resilience. Unfortunately, the decision of the Ministry of Finance does not leave us any choice but to take the above-mentioned action, since the vital interests of the State of Israel have been harmed," the statement said. "We hope that this crisis will be resolved as soon as possible."