Wallström said no other countries have embassies in the West Bank city of Ramallah, and Sweden is fine with using its consulate in Jerusalem to service needs in both Israel and Palestine.
It has been nearly three weeks since Sweden's new government officialluy recognised the state of Palestine. And over the weekend Israeli media drew attention to an official letter that King Carl Gustaf - Sweden's head of state - recently sent to the Palestinian Authority congratulating them on the occasion of the Palestinian national day.
Today, Margot Wallström told Swedish Radio - with a smile on her face - that this is simply what countries do.
"It's normal for the King to do this," said Wallström, adding that the negative reactions to the letter are based on people not being used to this situation.
Wallström is a veteran Social Democrat politician and became foreign minister after the general election in September. Now, she is representing Sweden as a member of the EU Council, where important decisions have to be taken by the member states themselves. As foreign minister she sits in the council meetings dealing with foreign policy.
Top of the agenda for today's meeting is Ukraine. The EU, including Sweden, has already placed sanctions on some Russian individuals over the country's illegal annexation of Ukraine's Crimea. These sanctions are hitting the Russian economy and helping the rouble come into free-fall against the dollar.
Wallström said the situation in Ukraine is a serious matter. As winter approaches, the humanitarian situation will worsen and many ministers at the EU meeting wanted to discuss this and how to go ahead, she said.
At least one million people have been made homeless by the conflict in Ukraine. And many EU countries are dependent on Russian gas supplies for heating during the winter.
But Wallström said no new decision on sanctions would be taken today in Brussels.
During the meeting, Reuters reported ministers had moved to put more sanctions on some pro-Russian rebels in Ukraine, but not on people in Russia itself.