Australia considers following U.S. policy shift on al-Quds

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Australian Prime Minister Scott Morrison's indication of his support for moving Australia's embassy in Israel to Jerusalem has met with a frosty reception in Indonesia, with Jakarta reportedly mulling over whether to put an imminent trade deal with Canberra on hold.

Morrison revealed the possibility in a telephone conversation with Prime Minister Benjamin Netanyahu on Monday.

Indonesia, the world's largest Muslim-majority country, also warned that Australia moving its embassy to Jerusalem could undermine a peace process between Israel and the Palestinians.

SCOTT Morrison's surprise announcement that he's open to moving Australia's embassy in Israel to Jerusalem has been slammed as "desperate attempt" to win votes at the crucial Wentworth by-election to hold onto government.

The candidate contesting the by-election for Morrison's Liberal party, Dave Sharma, is a former ambassador to Israel who was credited with the idea to relocate the embassy.

"The short-term political gain that could be secured by moving the Australian embassy from Tel Aviv to Jerusalem would surely be outweighed by the detriment both to Australia's worldwide standing and in its relations with Arab and Muslim-majority countries and the global community more broadly", the delegation said according to the Times of Israel.

Trump broke with decades of policy in moving the U.S. embassy to Jerusalem earlier this year, infuriating Palestinians who see the eastern section of the city as the capital of a future state.

"Both the government and the opposition have supported the approach of most other nations of maintaining our embassy in Tel Aviv on the grounds that Jerusalem's status must be determined as part of an overall two-state solution", Labor foreign affairs spokeswoman Penny Wong said in a statement.

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Meanwhile, Indonesia, which is a strong supporter of a Palestinian state, raised concerns which could derail the ongoing trade deal with Australia.

Mr Morrison said Australia needed to send a message that Palestine should not be allowed to chair the G77 bloc and he would not simply be abstaining from the vote.

All of this explains Mr Morrison's sudden foray into the Israeli-Palestinian conflict. His willingness to reverse decades of foreign policy and follow the lead of the United States alienated many of Australia's Asian neighbours that have close alliances with Palestinians.

Israel regards Jerusalem as its "eternal and undivided" capital, while the Palestinians claim East Jerusalem - occupied by Israel in the 1967 Middle East war - as the capital of a future state. The comments were made immediately following a meeting between Marsudi and her Palestine counterpart, Riad al-Maliki. He said no decision had been made and he was simply being open to the suggestion.

Global 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.

Israel considers Jerusalem its indivisible capital and wants all embassies based there.

He said in view of Australia's increased engagement with Israel on defence and security matters, the Government will appoint a resident Australian Defence Attaché in Tel Aviv and has invited Israel to appoint its own resident Defence Attaché in Canberra.