The announcement would be a symbolic gesture for what’s already a symbolic city, being home to some of the holiest sites of Judaism, Islam and Christianity.
The modern state of Israel, since its founding in 1948, has considered Jerusalem its indivisible capital.
Until now, no other country has recognised it as such due to the conflict with the Palestinians, who claim East Jerusalem as the capital of their own future state.
But Trump’s administration says recognition, along with making plans eventually to move the US embassy there, would essentially reflect the reality that the holy city already functions like the Israeli capital.
"I have determined that it is time to officially recognize Jerusalem as the capital of Israel," US President Donald Trump said on Wednesday.
"While previous presidents have made this a major campaign promise, they failed to deliver. Today, I am delivering. I've judged this course of action to be in the best interests of the United States of America and the pursuit of peace between Israel and the Palestinians."
Trump said this was a long overdue step to advance the peace process, and to work towards a lasting agreement.
“It is a diplomatic and symbolic move, another sign of recognition and acceptance,” says Oded Eran, a former Israeli ambassador to the European Union.
“We are accustomed by now to the situation where, although all the embassies are in Tel Aviv, when the ambassadors of these countries present their credentials, they go to the president of Israel, who lives and works in Jerusalem, if they want to meet the Israeli prime minister, they go to Jerusalem.”
US recognition would not determine issues like boundaries and sovereignty, which are left to negotiations with the Palestinians, and Jordan and Saudi Arabia would retain oversight of Islam’s holy sites in East Jerusalem.
But the Oslo Accords of the mid 1990s stipulate that the city’s status has to be decided as part of negotiations in the Israeli-Palestinian peace process.
So for Palestinians, the gesture would be symbolic of something else entirely.
“This is a declaration of the death of the so-called peace process,” says Mustafa Barghouti, a Palestinian MP and head of the Palestine National Initiative (the name of the party he set up).
“The United States is not only completely biased to Israel, but is ready to participate in committing a war crime and violation of international law, which does not permit annexation of occupied territories,” he continues.
“It’s very unwise, it’s reckless, but it means that after 25 years of negotiations, we are now clear: there is no peace process and we have to find an alternative way.”
Consequences for US ambitions in the Middle East
Aside from alienating the Palestinians, the Jerusalem move would also run the risk of troubling the consensus that Trump has been seeking to build in Saudi Arabia and other Arab states at least tacitly to cooperate with Israel in dealing with Iran.
“Trump has been warned against making this move by several of the Arab leaders and others, with whom the Trump administration has been garnering favour,” says Rosemary Hollis, professor of Middle East Policy Studies at City University London.
“The Arab leaders cannot turn a blind eye to the subjugation of the Palestinian population of the West Bank, East Jerusalem and the Gaza Strip to Israeli rule indefinitely, with no end in sight, no state, no national rights recognised under international law, and therefore no freedom,” Hollis says.
Considered reactions from the likes of US ally King Salman of Saudi Arabia, who told Trump that recognising Jerusalem as the capital would be a “flagrant provocation to Muslims”, it can be difficult to grasp what the US has to gain when it comes to its plans for Jerusalem.
“I don’t think it alters the fact that Israel and Saudi Arabia have reason to cooperate vis-a-vis Iran,” Hollis says.
“What I think the mistake is, is to assume that this is something that can be brought out in public, and can be used to somehow stitch up the Palestinians in a peace deal that will allow Israeli-Saudi cooperation to happen formally, as opposed to informally and secretly.”