Morrison insists Indonesia trade deal 'on track' despite Jerusalem tension

Australia considers following US on Jerusalem embassy

PM: Australia considering moving embassy to Jerusalem

Australia will consider recognising Jerusalem as Israel's capital and shifting its embassy there from Tel Aviv, Australia's Prime Minister said on Tuesday.

This claim has prompted debates in Australia and overseas, as the status of Jerusalem has been one of the key stumbling stones for negotiating a Palestinian-Israeli peace deal.

If Australia does indeed relocate its embassy to Jerusalem, it will become the third country to recognize the city as the capital of Israel. The embassy move would be yet another sign of increasingly close relations between the two states.

US President Donald Trump had in December declared his decision to do just that, breaking with diplomatic tradition and rankling Muslim-majority nations, including Indonesia and Malaysia.

Indonesia, the world's largest Muslim-majority country, on Tuesday warned Australia that moving its embassy to Jerusalem could undermine a peace process between Israel and the Palestinians.

"No one doubts that any negotiated two-state peace agreement would see Jerusalem remain as Israel's capital".

Joyce said that he wasn't proposing that the move would necessarily hurt trade relationships, arguing that countries were unlikely to stop trade with the United States despite the Trump administration's decision to move its embassy. The term "two-state solution" appears three times in Morrison and Payne's joint statement.

Netanyahu tweeted afterwards that the Australian premier had "informed me that he is considering officially recognizing Jerusalem [al-Quds] as the capital of Israel & moving the Australian embassy to Jerusalem [al-Quds]". Israel regards all of the city, including the eastern sector that it annexed after the 1967 Middle East war, as its capital. "Can we transfer our representative office in Ramallah, which is not yet an embassy, to East Jerusalem?"

"If we transfer our embassy to West Jerusalem, which we recognize as the Israeli capital, what should we do with East Jerusalem, which we have recognized as the Palestinian capital?"

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At the same time, it would also be a major foreign-policy win for Israeli Prime Minister Benjamin Netanyahu, who has focused on building relations with nontraditional allies in places such as the Asia-Pacific region, Latin America and Africa.

Sharma is the Liberal candidate in Wentworth, a district where voters - 13 percent of whom are Jewish - may end up determinig whether the Liberals maintain the seat. After the October 20 election, Morrison's enthusiasm for the idea might fade.

Mr Maliki said he was saddened that Australia might violate worldwide law and disrespect a UN Security Council resolution.

This pressure, too, might put the kibosh on Morrison's plan.

In addition, he is also expected to review the 2015 Iran nuclear deal.

Joyce told Sky News the government has "got to be careful" because many countries that import Australian agricultural exports including Indonesia, Qatar, Saudi Arabia, Bahrain and Jordan have "lots of sensitivities here".

The official added "We appreciate Australia's decision to vote no on the UN resolution", in reference to Australia's decision to oppose a resolution for the Palestinian Authority to chair a group of developing nations known as the G77.

He said it may be possible for his nation to support a two-state solution and recognise Jerusalem as Israel's capital - something that Australia had "to date assumed" was unfeasible.

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