Algeria has withdrawn its ambassador from France after Paris recognised a controversial Moroccan plan to give limited autonomy to Western Sahara, under its sovereignty.
French President, Emmanuel Macron, on Tuesday said in a letter that he saw this as the only way of resolving the long-standing dispute over the former Spanish colony.
"Our support for the autonomy plan proposed by Morocco in 2007 is clear and constant," said Macron in the letter sent to Morocco's King Mohammed VI.
Morocco claimed authority over the Western Sahara in 1975 and controls most of its territory.
Algeria backs the outlawed Polisario Front which claims to represent the indigenous Saharawi people and wants the Western Sahara to be an independent state.
France's decision to change its decades-long position on the status of Western Sahara is a major victory for Morocco.
Paris joins a growing number of countries, including Spain, the United States, and several African nations, that in recent years have backed Rabat's position.
But it is a major blow to the Polisario Front which has slammed France's support for Morocco as a bid to shore up its waning influence in Africa.
Algeria accused the French government of "denying the right of the Sahrawi people to self-determination".