On 21 January 2006, Pope Benedict XVI appointed him Apostolic Nuncio to Israel and Cyprus as well as Apostolic Delegate to Jerusalem and Palestine,[7] In April 2007, Franco threatened to boycott a Holocaust memorial ceremony at Yad Vashem because of the way the museum described Pope Pius XII's behavior toward the Jews during World War II. Franco relented saying he only meant to draw attention to the question and calling the dispute "only diplomacy".[8] The museum’s plaque describing Pope Pius' activities was later modified.[9] Franco also helped manage Pope Benedict’s visit to the Holy Land in May 2008, and he fostered discussions between religious communities and the Holy See and the regions’ governments.[9]
Franco retired from the diplomatic service in August 2012 but remained responsible for the dossier for negotiations between the Holy See and Israel regarding fiscal concerns, taxes and Church lands in Israel.[9]
