It is a move many in the Middle East feared, but now President Donald Trump appears to have decided to relocate the U.S. embassy in Israel from Tel Aviv to Jerusalem.
Trump informed Palestinian President Mahmoud Abbas of his highly contentious decision on Tuesday, Abbas' spokesman said.
"President Mahmoud Abbas received a telephone call from U.S. President Donald Trump in which he notified the President (Abbas) of his intention to move the American embassy from Tel Aviv to Jerusalem," spokesman Nabil Abu Rdainah said in a statement.
Officials in Jordan also confirmed that the U.S. leader had phoned King Abdullah to tell him.
Both men reportedly told Trump that the decision would have''dangerous consequences'' for the region. The reported move also drew warnings from Brussels.
"The European Union supports the resumption of a meaningful peace process towards a two-state solution. We believe that any action that would undermine these efforts must absolutely be avoided. A way must be found through negotiations to resolve the status of Jerusalem as the future capital of both states, so that the aspiration of both parties can be fulfilled," the EU's foreign policy chief Federica Mogherini said.
President Recep Tayyip Erdogan was far more emphatic, warning that Turkey could cut ties with Israel if the US formally recognises Jerusalem as Israel's capital.
Speaking in the Turkish parliament in Ankara he said: "Mr Trump, Jerusalem is the red line for Muslims."
He added: "Our struggle on this matter will continue with resolve. As a matter of fact this can go as far as breaking off our diplomatic relations with Israel."
Should Washington recognise the Holy City as the Israeli capital, the US would be the first country to do so since Israel's foundation in 1948.
From Jerusalem, NBC correspondent Ron Allen said: "We know that US diplomatic posts in the region have been warned to be on alert for possible unrest, there are rumblings of protests of the Palestinian community here, and the Israelis are talking about stepping up security and saying that of course they can handle every eventuality, the bottom line is that the region is on edge because President Trump is extremely unpredictable and no one knows what he would say or do."