Trump’s Jerusalem move may undermine his Iran policy

Significance

Previously, the United States, like the rest of the international community, had held that the question of Jerusalem's status was an issue for final-status negotiations between Israel and the Palestinians. After taking East Jerusalem in the 1967 war, Israel declared the whole city as its “indivisible” capital; however, its settlements there are not recognised under international law.

Impacts

• A two-state solution to the Israeli-Palestinian issue will become even more unlikely.
• Trump's high-profile gesture will shore up the domestic position of the Israeli premier.
• Fears of Palestinian violence could put short-term pressure on Israel’s currency and stock market.
• Trump will cement his appeal to core supporters (further helped by the anger of ideological opponents).