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Australia announces it now recognises West Jerusalem as Israel's capital

But the embassy will not move from Tel Aviv until a settlement is reached with the Palestinians

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Australia’s prime minister has announced his country now recognises West Jerusalem as the capital of Israel and is starting a search for a suitable site for its embassy within the city.

Prime Minister Scott Morrison said in a speech to the Sydney Institute that “we look forward to moving our embassy to West Jerusalem when practical, in support of, and after the final status determination.”

The announcement followed months of speculation that a move similar to the one taken by the United States on Donald Trump’s orders earlier this year might be imminent.

But Mr Morrison said Australia would not relocate its embassy and instead open a “Trade and Defence Office” in West Jerusalem until a final settlement is reached with the Palestinians.

He said: “The UN Security Council has consistently endorsed a two-state solution, negotiated directly between Israel and the Palestinians, as the way in which ‘final status’ issues are to be resolved.

“These ‘final status’ issues include the status of Jerusalem, the right of return of refugees, the status of Israeli settlements, and the provision of security and the future borders of a Palestinian state.”

He added that Australia had “also resolved to acknowledge the aspirations of the Palestinian people for a future state with its capital in East Jerusalem.”

But opposition leaders said the decision not to move the embassy at once was “a humiliating rebuff” to Mr Morrison, who first suggested Australia would change its recognition policy ahead of a crucial parliamentary by-election in Wentworth, a constituency with a significant Jewish population.

“We are having an argument about something that most Australians didn't realise was a problem,” said Labor leader Bill Shorten.

“My fear is that Mr Morrison hasn't just had to do a political back down, my fear is that he has made Australia look stupid on the international stage.

“Rushing in and making a premature announcement about Middle Eastern foreign policy just to sort out a domestic political by-election in Wentworth, I feel was risky and foolish. What I am worried about is that Mr Morrison put his political interest ahead of our national interest.”

Muslim-majority Malaysia, a key regional trading partner for Australia, said the decision was a "humiliation to the Palestinians".

But Israel's foreign ministry said it was a move in the right direction.

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