Australia considers following United States on Jerusalem embassy

East Jerusalem Palestine which remains under Israeli occupation

Prime Minister Scott Morrison says he will discuss a potential move of Australia's embassy in Israel to Jerusalem, from Tel Aviv, before he makes a final decision, but that he is open to the idea.

While the possibility of relocating the Australian embassy to Jerusalem was welcomed by Netanyahu, Morrison's critics blamed the PM of catering to the Jewish electorate of Wentworth, where former Ambassador Sharma is trailing behind in the opinion polls ahead of the crucial parliamentary by-election scheduled this week.

The Trump administration turned its back on decades of U.S. policy by recognising Jerusalem as Israel's capital and moving the USA embassy from Tel Aviv in May.

Morrison told news site The Australian on Monday that the recognition of Jerusalem had previously been discussed by top cabinet members, including former foreign minister Julie Bishop, after Trump announced the United States recognition of the Israeli capital last December. "I'm very thankful to him for this".

You see we want to see a two state solution achieved and sometimes to achieve that you have got to think about doing things differently.

Labor has raised concerns about a possible breakdown in relations with the Muslim-majority nation since the Prime Minister flagged the possible foreign policy shift.

"Foreign policy and Australia's national interest are far too important to be played with in this fashion", lawmaker Penny Wong said.

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Netanyahu has attempted to persuade other countries to move their embassies to Jerusalem.

"I have made this decision without any reference to the United States".

"This is a regular part of our management of these foreign affairs relationships and I am pleased to be able to explain very clearly the nature of the announcements I have made today and I have been very pleased with the response that [we] have received from President Joko Widodo and we'll continue to work closely and cooperatively with our allies and with our partners all around the world on these issues", Mr Morrison said.

Labor is concerned the approach could undermine the prospect of a two-state solution between Israel and Palestine.

Morrison also said Australia would review its support for the Iran nuclear deal, under which sanctions were lifted in return for restraints on its nuclear programme "to determine whether our current policy settings remain fit for purpose".

Earlier on Monday, Sharma argued in favor of recognizing Jerusalem during a election event in Bondi.

"When sensible suggestions are put forward that are consistent with your policy positioning and in this case pursuing a two-state solution, Australia should be open-minded to this and I am open-minded to this and our government is open-minded to this", Morrison told reporters.

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