Scott Morrison is criticised by the Opposition for his 'all risk and no gain' decision

Australia has decided to formally recognise West Jerusalem as the capital of Israel, but will not move its embassy from Tel Aviv until a peace settlement is achieved. "Australia now recognises West Jerusalem, being the seat of the Knesset and many of the institutions of government, is the capital of Israel," said Mr Morrison, speaking in Sydney on Saturday. "We look forward to moving our embassy to West Jerusalem when practical," he told reporters in Sydney.Morrison said in October he was open to shifting Australia's embassy from Tel Aviv. In an unexpected announcement in October, Mr Morrison said he was open to moving Australia's embassy from Tel Aviv. President Donald Trump’s decision to move the U.S. embassy to Jerusalem from Tel Aviv in May delighted Israel, infuriated Palestinians and upset the wider Arab world and Western allies. Arab countries worried that the move would unnecessarily inflame tensions in the Middle East.Israel regards all of Jerusalem as its capital, including the eastern sector that it annexed after the 1967 Middle East war, and wants all embassies based there. Around 600,000 Israelis live in settlements in the West Bank , including annexed east Jerusalem, which are considered illegal by the international community. The international community believes Jerusalem's status should be resolved through negotiation.The status of Jerusalem, home to sites holy to the Muslim, Jewish and Christian faiths, is one of the biggest obstacles to a peace agreement between Israel and Palestinians who want east Jerusalem recognized as the capital of a Palestinian state.Morrison said Australia would not move its embassy to West Jerusalem until the city's final status was determined, but said trade and defense offices would be opened there.He confirmed Australia's support for a two-state solution with a Palestinian capital in east Jerusalem. Indonesia’s foreign ministry spokesman, Arrmanatha Nasir, noted that Australia had not moved its embassy to Jerusalem and called on all members of the United Nations to recognize a Palestinian state “based on the principle of two-state solutions”.
Australia formally recognizes West Jerusalem as the capital of Israel and East Jerusalem as the capital of a future Palestinian state but will not move its embassy from Tel Aviv until a peace settlement is reached with the Palestinians.