July 12 (UPI) -- Spanish King Felipe VI, in a speech before British Parliament, said he hoped to negotiate new "arrangements" for Gibraltar as part of larger talks with the U.K. over its departure from the European Union.
Gibraltar sits at the southern tip of the Spain at the mouth of the Mediterranean Sea, but has been under British control since its capture in 1704 during the War of Spanish Succession. The territory remains a British protectorate with a sovereign government to oversee domestic affairs despite Spain's historic dispute for control.
The territory holds both economic and military value. It is a high-end tourist destination, and because it overlooks the Strait of Gibraltar which is only eight miles wide, it is strategic for naval operations in north Africa and the Middle East.
Speaking to U.K. lawmakers in the House of Lords on Wednesday, Felipe said he hoped Brexit negotiations would yield a new agreement about control of Gibraltar.
"I am certain that this resolve to overcome our differences will be even greater in the case of Gibraltar, and I am confident that through the necessary dialogue and effort our two governments will be able to work towards arrangements that are acceptable to all involved," he said.
The European Union suggested terms of a the Brexit negotiations would not apply to Gibraltar unless Spain agrees, effectively giving them the chance to negotiate more favorable terms over its control.
Prior to Felipe's speech, the topic was broached during a question-and-answer session in the House of Commons, where a conservative lawmaker asked whether Prime Minister Theresa May intended to reaffirm Britain's control of Gibraltar during talks with the Spanish monarch.
He asked May to "remind the King of Spain that Gibraltar is British and that its sovereignty will remain paramount."
Gibraltar's Chief Administrator Fabian Picardo reacted angrily to Felipe's speech, saying it should be up to the people of Gibraltar to determine their own fate, rather than it being decided by the governments in London and Madrid.
"Any dialogue there may be going forward, something which we would welcome as long as they obviate the issue of sovereignty which as far as we are concerned is not up for discussion or negotiation," Picardo said
Residents there have twice voted overwhelmingly to remain with the British rather than return to Spanish control. The most recent referendum was in 2002.