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Australia Recognizes West Jerusalem as Israel's Capital 

FILE - Australian Prime Minister Scott Morrison delivers a speech in Parramatta, Australia, Nov. 22, 2018.

Australia will recognize West Jerusalem as the capital of Israel but will not immediately move its embassy from Tel Aviv. Prime Minister Scott Morrison will also acknowledge the aspirations of Palestinians for a future state with its capital in East Jerusalem.

If, in the future, Jerusalem’s status is finalized under a peace settlement, Australia says it could move its embassy then. In October, Morrison said he found arguments in favor of moving Australia’s diplomatic presence from Tel Aviv to be “persuasive.” He denied his comments were an attempt to influence Jewish voters in a crucial by-election in Sydney.

Trade deal

There was support from the Israeli government, but Palestinian leaders said Australia risked becoming an “international pariah.”

A major trade deal between Australia and neighboring Indonesia, which has the world’s largest Muslim population, has also been jeopardized because of speculation Canberra could move its embassy to Jerusalem.

Palestinian leaders have also lobbied Arab and other states to stop buying Australian exports and withdraw their ambassadors from Canberra in the event of an embassy move.

The decision not to relocate the Australian embassy should ease some of that diplomatic pressure, according to Daniel Flitton, managing editor of the Lowy Institute’s Interpreter, a magazine produced by the Sydney-based think-tank.

“That really depends on the reaction from the rest of the world as to whether or not this issue continues to dog the government,” Flitton said.

“There is a difference between when a United States makes this decision and the rest of the world reacts because the United States is a big power versus when Australia makes this decision, and there is a risk that some countries might choose to try and make Australia an example and to try and punish Australia as a consequence. That might mean that the issue stays live for the months ahead. But my suspicious is that the decision to change the recognition but not physically move the embassy will probably limit the consequences,” he added.

Australia is not US

Israeli sovereignty over Jerusalem has never been acknowledged internationally.

Last December, U.S. President Donald Trump overturned decades of U.S. neutrality when he recognized the divided city as Israel’s capital, prompting widespread condemnation. It led to the Palestinian Authority cutting off dialogue with Washington. At the time, the Trump administration said it was “strongly committed to achieving a lasting and comprehensive peace” in the region.

The American embassy was moved from Tel Aviv in May.