Australia's PM also announced they support a two-state solution with East Jerusalem as the capital of a future Palestinian state.
Australia formally recognizes West Jerusalem as Israel's capital, Prime Minister Scott Morrison said on Saturday. However, the transfer of the Australian Embassy, currently in Tel Aviv will not happen immediately.
"Australia now recognizes West Jerusalem ... is the capital of Israel," said Morrison and added that "we look forward to moving our embassy to West Jerusalem when practical."
Australian Prime Minister's announcement drew criticism from Indonesia, Malaysia, and Arab countries, which were worried that such recognition would unnecessarily inflame tensions in the Middle East.
The Australian decision was expected since at least two months ago.
In a letter to @ScottMorrisonPM l urged him to refrain from changing Australia's policy on #Jerusalem by illegally recognising it as Israel’s capital. Australia must respect int’l law & UNSC resolutions instead of contributing to instability & injustice. https://t.co/3CH22Nrb56
The Palestine Liberation Organization(PLO) requested Australia to ensure strict compliance with its obligations under international law, as well as to respect the United Nations Security Council' relevant resolutions.
PLO Executive Committee member Hanan Ashrawi stated that the Australian decision "would violate the legal status of Jerusalem" and would also endanger the possibilities of resuming peace negotiations between Israelis and Palestinians.
"The only way to solve the Jerusalem problem would be to recognize the State of Palestine, with East Jerusalem as its capital, in line with international law," Ashrawi said.
Prime Minister Morrison also confirmed Australia's support for a two-state solution with a Palestinian capital in East Jerusalem.
"The [Australian] government also intends to recognize the Palestinians' aspirations of a future state with its capital in East Jerusalem," Morrison stressed and added "what we are saying is we've got to move this forward. The rancid stalemate has to be broken."
The Australian decision comes almost a year after United States President Donald Trump announced the recognition of Jerusalem as the capital of Israel and transferred the U.S. Embassy from Tel Aviv to the occupied city of Jerusalem. Since then, Guatemala and Brazil made similar announcements.