After Donald Trump's move, Morrison announced on Tuesday that he was considering relocating the Australian embassy from the coastal city of Tel Aviv to Jerusalem and declaring the city as the Israeli capital.
Israeli Prime Minister Benjamin Netanyahu tweeted his approval on Monday.
Morrison told reporters that he would make an announcement on Tuesday regarding Jerusalem al-Quds and Australia's "No" vote for a United Nations resolution allowing Palestine to chair the Group of 77.
Australia would be "violating global law" and United Nations security council resolutions if it proceeded with the embassy move, said Palestinian foreign minister Riyad al-Maliki, who was in Jakarta on an official visit Tuesday.
Israel regards all of the city, including the eastern sector that it annexed after the 1967 Middle East war, as its capital while the Palestinians, with broad global backing, want East Jerusalem as the capital of a future state that they hope to establish in the occupied West Bank and the Gaza Strip. Local media is suggesting Morrison was merely playing up Dave Sharma's arguments to help the former Israel envoy win his upcoming by-elections in Wentworth, a district near Sydney that is home to many Jews.
Labor reminded the government that Frances Adamson, the head of Australia's foreign department, said in June that the USA move had "not been helpful" for the Middle East peace process.
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Mr Howard added that as candidates, former U.S. presidents Bill Clinton, George W. Bush and Barack Obama had all recognised Jerusalem as the capital of Israel. "I think we have to challenge that", Morrison said earlier in Canberra.
The Palestinian mission has also slammed the announcement as "deeply disturbing".
"Indonesia asks Australia and other countries to support peace talks. and not take steps that would threaten that peace process and stability of world security", Marsudi said. He said no decision had been made and he was simply being open to the suggestion. "It has not come up in any discussion that I have had with the president or officials".
"Indonesia reiterates that [the political status of] Jerusalem is one of six issues that have to be negotiated and decided as a sustainable solution", she said. "Can we transfer our representative office in Ramallah, which is not yet an embassy, to East Jerusalem?"
At the time the Guardian reported that, Foreign Minister Julie Bishop ruled out the move stating that "Jerusalem is a final status issue" and that Australian had "maintained that position for decades". It's a bit cute to say its consistent with a two-state solution. No country, up until last week, had held its embassy in Jerusalem instead keeping them in Israeli commercial capital Tel Aviv.
Ambassadors from 13 Arab countries met in Canberra on Tuesday and agreed to send a letter to Australia's foreign minister expressing their concern, Egyptian ambassador to Australia Mohamed Khairat said. Israel regards all of the city, including the eastern sector that it annexed after the 1967 Middle East war, as its capital.