I think there is a significant difference with the Town Halls flying flags for Mrs Thatcher's passing, Gromit. That is , they flew the Union flag, the national flag of the United Kingdom, the country in which the Town Halls are situated and the country of which Lady Thatcher was a reasonably successful Prime Minister for twelve years.
Local authorities should not involve themselves in international disputes. (Their argument that they are showing sympathy with those killed holds no water or they would fly the flags of both nations, regardless of the relative numbers of casualties). Such disputes are somewhat beyond their remit which extends to emptying the bins, filling in potholes and running their often none too brilliant schools. It may not have occurred to them that not all of their good burghers may like to see foreign flags flying over their local Town Hall.