US president Donald Trump broke with his predecessors on Wednesday, declaring Jerusalem as the capital of Israel.
Mr Trump ordered the state department to start the process of moving the American embassy from Tel Aviv and is dispatching vice-president Mike Pence to the Middle East.
“I have determined to officially recognise Jerusalem as capital of Israel,” he said in the diplomatic room in the White House.
Mr Trump cited the US's Jerusalem Embassy Act of 1995, which urged the federal government to relocate the American embassy to Jerusalem and to recognise that city as Israel’s capital. The act was reaffirmed by a unanimous vote of the senate only six months ago. Previous US presidents, however, have signed waivers every six months deferring a move of the embassy.
“Jerusalem is not just the heart of three great religions, but it is now also the heart of one of the most successful democracies in the world," Mr Trump said on Wednesday. "Over the past seven decades, the Israeli people have built a country where Jews, Muslims, Christians, and people of all faiths are free to live and worship according to their conscience and beliefs.
“The United States remains deeply committed to helping facilitate a peace agreement that is acceptable to both sides. I intend to do everything in my power to help forge such an agreement."
But Palestinian officials said the move would be hugely damaging to the chances of peace and likely spark violence both locally and regionally.
Mr Trump also praised the people of the region, and reminded listeners of his trip to Saudi Arabia in May to encourage the fight against extremism and work for a lasting peace.
“There will of course be disagreement and dissent regarding this announcement — but we are confident that ultimately, as we work through these disagreements, we will arrive at a place of greater understanding and co-operation.”
The president said that on taking office, he had promised "to look at the world’s challenges with open eyes … we can't repeat failed challenges of past".
For two decades, US presidents had signed waivers every six months deferring the decision to relocate the embassy from Tel Aviv. And yet, a solution to the Israeli-Palestine conflict was no closer, Mr Trump said.
The last deadline for the waiver was December 1. Mr Trump missed it.
He also stressed that the recognition “does not prejudge the final status" of Jerusalem or affect the status quo of Haram Al Sharif — known to Jews as Temple Mount — and Al Aqsa Mosque but is rather “a recognition of reality”.
Asked by The National what the effect of this decision will be on US-Gulf relations, a senior US official said: "We do not believe it will undermine relations. We will continue to work together on issues related to Yemen, fighting terrorism and countering Iran."
However, all US diplomatic posts have been advised not to make non-essential trips to Israel or the West Bank until December 20.
A US senior official also confirmed to The National that Mr Trump had invited Palestinian president Mahmoud Abbas to the White House during a telephone conversation on Tuesday, but that no date has yet been set for that meeting.
Ignoring intense opposition from Europe and the Arab world, Mr Trump will instruct the US state department to begin the long process of moving the American embassy from Tel Aviv to the holy city, which will take at least three years. In his speech he referred to the hiring of architects and engineers to design and build a "magnificent" new embassy.
Mr Trump made the promise to move the embassy during his election campaign, much to the delight of Israeli nationalists and supporters. But the decision is fraught with religious and political implications.
Unlike Israel, whose government considers the entire city as its capital, most of the international community regards its eastern sector as occupied territory and says Jerusalem’s final status must be negotiated, not unilaterally declared. Mr Trump’s decision is a huge blows for Palestinians, who regard it as evidence of America disregarding their position.
Palestinian prime minister Rami Hamdallah warned that the move would not only fuel the conflict with Israel, but kindle unrest across the Middle East. Palestinian factions have called for “days of rage” following Trump’s speech, and before he spoke, hundreds protested against the plan in the Gaza Strip.
Israeli prime minister Benjamin Netanyahu, meanwhile, was conspicuously silent in the hours before Mr Trump's announcement, not even mentioning it at a high-profile conference in Jerusalem on Wednesday. Israel Radio, without saying where it got the information, reported that the Philippines and an unidentified eastern European country wanted to follow Mr Trump’s suit in recognising Jerusalem as Israel’s capital.
Leaders of major Christian denominations in the Holy Land had written to Mr Trump, urging him to reconsider, saying his decision will mean "increased hatred, conflict, violence and suffering in Jerusalem and the Holy Land” and cause “irreparable harm".
The letter was signed by all the major church figures, including the Greek Orthodox patriarch, Theophilos III, and Archbishop Pierbattista Pizzaballa, the Roman Catholic apostolic administrator.
The move is not even popular with all Jews. The Union for Reform Judaism in the United States called it “ill-timed".