President Donald Trump has announced that the US now recognises Jerusalem as Israel’s capital, overturning decades of official US policy.
Mr Trump described the move as “a long overdue step” to advance the Middle East peace process.
The president said the US would support a two-state solution, if approved by both the Israelis and the Palestinians.
Speaking at the White House, Mr Trump said he had “judged this course of action to be in the best interests of the United States of America, and the pursuit of peace between Israel and the Palestinians”.BBC reports.
The president said he was directing the US state department to begin preparations to move the US embassy from Tel Aviv to Jerusalem.
In response, Israeli Prime Minister Benjamin Netanyahu said it was a historic day, and Israel was profoundly grateful to President Trump.
Palestinian President Mahmoud Abbas responded to the decision by saying the US could no longer be a peace broker.
He earlier warned of “dangerous consequences” through a spokesman.