The Holy See—as distinct from the city-state of the Vatican City, over which the Holy See has "full ownership, exclusive dominion, and sovereign authority and jurisdiction", has long been recognised as a subject of international law and as an active participant in international relations. It remains such, and indeed one observer has said that its interaction with the world has, in the period since World War II, been at its highest level ever.
The diplomatic activities of the Holy See are directed by the Secretariat of State (headed by the Cardinal Secretary of State), through the Section for Relations with States.
The Holy See recognizes all UN member states, with the exception of the People's Republic of China (it only recognizes the Republic of China) and possibly the Democratic People's Republic of Korea (as the Holy See has relations only with the Republic of Korea, which claims the entire Korean Peninsula). The Holy See does recognize the State of Palestine, but does not recognize any other non-UN member states with the exception of the aforementioned Republic of China.
Since medieval times the episcopal see of Rome has been recognized as a sovereign entity. Earlier, there were papal representatives (apocrisiarii) to the Emperors of Constantinople, beginning in 453, but they were not thought of as ambassadors. In the eleventh century the sending of papal representatives to princes, on a temporary or permanent mission, became frequent. In the fifteenth century it became customary for states to accredit permanent resident ambassadors to the Pope in Rome. The first permanent papal nunciature was established in 1500 in Venice. Their number grew in the course of the sixteenth century to thirteen, while internuncios (representatives of second rank) were sent to less-powerful states. After enjoying a brilliant period in the first half of the seventeenth century, papal diplomacy declined after the Peace of Westphalia in 1648, being assailed especially by royalists and Gallicans, and the number of functioning nuncios was reduced to two in the time of Napoleon, although in the same period, in 1805, Prussia became the first Protestant state to send an ambassador to Rome. There was a revival after the Congress of Vienna, which, while laying down that, in general, the order of precedence between ambassadors would be determined by the date of their arrival, allowed special precedence to be given to the nuncio, by which he would always be the dean of the diplomatic corps.