The Palestinians and several Muslim countries expressed indignation after Australian Prime Minister Scott Morrison announced he was considering recognizing Jerusalem as Israel's capital and moving the country's embassy to the city.
Australian Prime Minister Scott Morrison said on Wednesday a billion-dollar free trade agreement with Indonesia will be signed this year, despite Indonesian concern over an Australian proposal to recognize Jerusalem as the Israeli capital.
"We are committed to a two-state solution, but frankly, it hasn't been going that well", Morrison said.
However, given that one of Indonesia's foremost foreign policy positions is support for a Palestinian state, Mr Morrison's declaration in support of Jerusalem as Israel's capital has not gone down well in Jakarta.
However, Morrison said no decision had been made there had been no discussion on the matter with the United States, which has already moved its embassy to Jerusalem.
Later, the head of the Australian government stated that the issue will be resolved before the end of this year.
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Morrison is scheduled to make an announcement regarding Australia's backing of the Iran nuclear deal and a vote about Palestinian leadership Tuesday, the Herald reported.
When the government forced former Prime Minister Malcolm Turnbull from office in August, he quit Parliament.
Morrison responded by declaring that his party firmly supports Israel, and also backs a two-state solution to the Israeli-Palestinian conflict. We have seen outrageous resolutions from "Zionism is racism" to denials of the Jewishness of the Western Wall in Jerusalem.
Few voters outside of Wentworth, many of whom would be horrified at the prospect of Australia becoming only the second country after the U.S. to set up an embassy in the highly contested holy city, will fall for such a ploy. No country, up until last week, had held its embassy in Jerusalem instead keeping them in Israeli commercial capital Tel Aviv.
The resolution condemns Israel's attempt to annex East Jerusalem and states that the Security Council will not recognize Israel's declaration of Jerusalem as its capital.
"Foreign policy, and Australia's national interest are far too important to be played with in this fashion", she said.
Worldwide consensus has been that Jerusalem's status should be settled in a peace deal and recognising it as a capital for either side would prejudice one party over the other. The U.S. Embassy officially opened in Jerusalem in May.
Palestine's Maliki, who is in Jakarta as part of a week-long celebration of Palestinian solidarity by Indonesia, said Australia was at risk of violating global law, as well as its business relations with the rest of the world.