diff --git a/.github/workflows/scripts/labeler.js b/.github/workflows/scripts/labeler.js
index 769683174688..17205f47cca8 100644
--- a/.github/workflows/scripts/labeler.js
+++ b/.github/workflows/scripts/labeler.js
@@ -13,37 +13,59 @@ You may obtain a copy of the License at
  limitations under the License.
 */
 
-
 /**
  * Invoked from labeler.yaml file to add
  * label 'Gemma' to the issue and PR for which have gemma keyword present.
  * @param {!Object.<string,!Object>} github contains pre defined functions.
- *  context Information about the workflow run.
+ * context Information about the workflow run.
  */
 
 module.exports = async ({ github, context }) => {
-    const issue_title = context.payload.issue ?  context.payload.issue.title : context.payload.pull_request.title
-    const issue_description = context.payload.issue ? context.payload.issue.body : context.payload.pull_request.body
-    const issue_number = context.payload.issue ? context.payload.issue.number : context.payload.pull_request.number
+
+    // Determine if the event is an issue or a pull request.
+    const isIssue = !!context.payload.issue;
+
+    // Get the issue/PR title, description, and number from the payload.
+    // Use an empty string for the description if it's null to prevent runtime errors.
+    const issue_title = isIssue ? context.payload.issue.title : context.payload.pull_request.title;
+    const issue_description = (isIssue ? context.payload.issue.body : context.payload.pull_request.body) || '';
+    const issue_number = isIssue ? context.payload.issue.number : context.payload.pull_request.number;
+    
+    // Define the keyword-to-label mapping.
     const keyword_label =  {
-         gemma:'Gemma'
-    }
-    const labelsToAdd = []
-    console.log(issue_title,issue_description,issue_number)
+         gemma: 'Gemma'
+    };
+    // Array to hold labels that need to be added.
+    const labelsToAdd = [];
+
+    console.log(`Processing event for issue/PR #${issue_number}: "${issue_title}"`);
     
-    for(const [keyword, label] of Object.entries(keyword_label)){
-     if(issue_title.toLowerCase().indexOf(keyword) !=-1 || issue_description.toLowerCase().indexOf(keyword) !=-1 ){
-        console.log(`'${keyword}'keyword is present inside the title or description. Pushing label '${label}' to row.`)
-        labelsToAdd.push(label)
+    // Loop through the keywords and check if they exist in the title or description.
+    for (const [keyword, label] of Object.entries(keyword_label)) {
+        // Use .includes() for a cleaner and more modern check.
+        if (issue_title.toLowerCase().includes(keyword) || issue_description.toLowerCase().includes(keyword)) {
+            console.log(`'${keyword}' keyword is present in the title or description. Pushing label '${label}' to the array.`);
+            labelsToAdd.push(label);
+        }
+    }
+
+    // Add labels if the labelsToAdd array is not empty.
+    if (labelsToAdd.length > 0) {
+        console.log(`Adding labels ${labelsToAdd} to issue/PR '#${issue_number}'.`);
+        
+        try {
+            // Await the asynchronous API call to ensure it completes.
+            await github.rest.issues.addLabels({
+                owner: context.repo.owner,
+                repo: context.repo.repo,
+                issue_number: issue_number, // Use the correct issue_number variable
+                labels: labelsToAdd
+            });
+            console.log(`Successfully added labels.`);
+        } catch (error) {
+            console.error(`Failed to add labels: ${error.message}`);
+        }
+    } else {
+        console.log("No matching keywords found. No labels to add.");
     }
-   }
-   if(labelsToAdd.length > 0){
-    console.log(`Adding labels ${labelsToAdd} to the issue '#${issue_number}'.`)
-     github.rest.issues.addLabels({
-        owner: context.repo.owner,
-        repo: context.repo.repo,
-        issue_number: context.issue.number,
-        labels: labelsToAdd
-     })
-   }
-};
\ No newline at end of file
+};
diff --git a/keras/src/backend/openvino/excluded_concrete_tests.txt b/keras/src/backend/openvino/excluded_concrete_tests.txt
index f275493ccbbd..8bf297bcba71 100644
--- a/keras/src/backend/openvino/excluded_concrete_tests.txt
+++ b/keras/src/backend/openvino/excluded_concrete_tests.txt
@@ -88,7 +88,6 @@ NumpyOneInputOpsCorrectnessTest::test_corrcoef
 NumpyOneInputOpsCorrectnessTest::test_correlate
 NumpyOneInputOpsCorrectnessTest::test_cumprod
 NumpyOneInputOpsCorrectnessTest::test_diag
-NumpyOneInputOpsCorrectnessTest::test_diagonal
 NumpyOneInputOpsCorrectnessTest::test_exp2
 NumpyOneInputOpsCorrectnessTest::test_flip
 NumpyOneInputOpsCorrectnessTest::test_floor_divide
diff --git a/keras/src/backend/openvino/numpy.py b/keras/src/backend/openvino/numpy.py
index 251e09c5c785..56751a085c09 100644
--- a/keras/src/backend/openvino/numpy.py
+++ b/keras/src/backend/openvino/numpy.py
@@ -1,6 +1,7 @@
 import numpy as np
 import openvino.opset14 as ov_opset
 from openvino import Type
+from openvino.runtime import opset13 as ov
 
 from keras.src.backend import config
 from keras.src.backend.common import dtypes
@@ -17,6 +18,108 @@
 from keras.src.backend.openvino.core import ov_to_keras_type
 
 
+def diagonal(x, offset=0, axis1=0, axis2=1):
+    x_node = ov.constant(x)  # -> ov.Node
+    offset_const = ov_opset.constant(int(offset), dtype="i64")
+
+    # rank & normalize axes
+    shape = ov_opset.shape_of(x_node)  # i64 vector
+    rank = ov_opset.shape_of(shape)  # scalar i64 (len of shape)
+    rank_val = ov_opset.squeeze(rank)  # [] -> scalar
+    axis1_node = ov_opset.floor_mod(
+        ov_opset.add(ov_opset.constant(int(axis1), dtype="i64"), rank_val),
+        rank_val,
+    )
+    axis2_node = ov_opset.floor_mod(
+        ov_opset.add(ov_opset.constant(int(axis2), dtype="i64"), rank_val),
+        rank_val,
+    )
+ 
+    arange = ov_opset.range(
+        ov_opset.constant(0, dtype="i64"),
+        rank_val,
+        ov_opset.constant(1, dtype="i64"),
+    )
+    mask1 = ov_opset.equal(arange, axis1_node)
+    mask2 = ov_opset.equal(arange, axis2_node)
+    not12 = ov_opset.logical_not(ov_opset.logical_or(mask1, mask2))
+    others = ov_opset.squeeze(
+        ov_opset.non_zero(not12), [1]
+    )  # gather positions != axis1, axis2
+    perm = ov_opset.concat(
+        [
+            others,
+            ov_opset.reshape(axis1_node, [1]),
+            ov_opset.reshape(axis2_node, [1]),
+        ],
+        0,
+    )
+    
+    x_perm = ov_opset.transpose(x_node, perm)
+    permuted_shape = ov_opset.shape_of(x_perm)
+    d1 = ov_opset.gather(
+        permuted_shape,
+        ov_opset.constant([-2], dtype="i64"),
+        ov_opset.constant(0, dtype="i64"),
+    )
+    d2 = ov_opset.gather(
+        permuted_shape,
+        ov_opset.constant([-1], dtype="i64"),
+        ov_opset.constant(0, dtype="i64"),
+    )
+    d1 = ov_opset.squeeze(d1)  # scalar
+    d2 = ov_opset.squeeze(d2)  # scalar
+
+    # start1 = max(0, offset), start2 = max(0, -offset)
+    zero = ov_opset.constant(0, dtype="i64")
+    start1 = ov_opset.maximum(zero, offset_const)
+    start2 = ov_opset.maximum(zero, ov_opset.negative(offset_const))
+
+    # L = min(d1 - start1, d2 - start2)
+    l1 = ov_opset.subtract(d1, start1)
+    l2 = ov_opset.subtract(d2, start2)
+    L = ov_opset.minimum(l1, l2)
+
+    # r = range(0, L, 1)  -> shape [L]
+    r = ov_opset.range(zero, L, ov_opset.constant(1, dtype="i64"))
+    idx_row = ov_opset.add(r, start1)
+    idx_col = ov_opset.add(r, start2)
+    idx_row = ov_opset.unsqueeze(
+        idx_row, ov_opset.constant(1, dtype="i64")
+    )  # [L,1]
+    idx_col = ov_opset.unsqueeze(
+        idx_col, ov_opset.constant(1, dtype="i64")
+    )  # [L,1]
+    diag_idx = ov_opset.concat([idx_row, idx_col], 1)  # [L,2]
+
+    # Broadcast indices to batch dims: target shape = (*batch, L, 2)
+    # batch_rank = rank(x) - 2
+    two = ov_opset.constant(2, dtype="i64")
+    batch_rank = ov_opset.subtract(rank_val, two)
+    # build target shape: concat(permuted_shape[:batch_rank], [L, 2])
+    batch_shape = ov_opset.strided_slice(
+        permuted_shape,
+        begin=ov_opset.constant([0], dtype="i64"),
+        end=ov_opset.reshape(batch_rank, [1]),
+        strides=ov_opset.constant([1], dtype="i64"),
+        begin_mask=[0],
+        end_mask=[0],
+    )
+    target_shape = ov_opset.concat(
+        [
+            batch_shape,
+            ov_opset.reshape(L, [1]),
+            ov_opset.constant([2], dtype="i64"),
+        ],
+        0,
+    )
+    bcast_idx = ov_opset.broadcast(diag_idx, target_shape)
+
+    # GatherND with batch_dims = batch_rank
+    gathered = ov_opset.gather_nd(x_perm, bcast_idx, batch_rank)
+
+    return OpenVINOKerasTensor(gathered)
+
 def add(x1, x2):
     element_type = None
     if isinstance(x1, OpenVINOKerasTensor):
@@ -677,12 +780,6 @@ def diag(x, k=0):
     raise NotImplementedError("`diag` is not supported with openvino backend")
 
 
-def diagonal(x, offset=0, axis1=0, axis2=1):
-    raise NotImplementedError(
-        "`diagonal` is not supported with openvino backend"
-    )
-
-
 def diff(a, n=1, axis=-1):
     if n == 0:
         return OpenVINOKerasTensor(get_ov_output(a))