Trump's recognition of Jerusalem as Israeli capital causes controversy

Countries from all over the world have rushed to criticise US President Donald Trump's recognition of Jerusalem as the capital of Israel, which has further raised tensions in the already-strained wider Middle East.

On Wednesday, Trump announced that he was delivering on a promise that other presidents had failed to do, and stated US recognition of the movement of the capital away from Tel Aviv.

He said that the US is still deeply committed to helping facilitate a peace agreement accepted by both sides, although accepting Jerusalem as the Israeli capital is “the right thing to do”.

"Israel is a sovereign nation with the right like every other sovereign nation to determine its own capital," Trump said.

He also announced an order for the state department to move the US embassy from Tel-Aviv to Jerusalem: “This will immediately begin the process of hiring architects, engineers, and planners, so that a new embassy, when completed, will be a magnificent tribute to peace,” the President said.

Most prominently Arab and Muslim countries have criticised the announcement, as leaders of some European countries like the UK, France and Germany also disagree with the move.

French president Emmanuel Macron said Trump's decision was "regrettable" and that the new American policy "contravenes international law."

“The status of Jerusalem is a question of international security that concerns the entire international community. The status of Jerusalem must be determined by Israelis and Palestinians in the framework of negotiations under the auspices of the United Nations,” said Macron.

UK Prime Minister Theresa May said that Trump's actions were "unhelpful in terms of prospects for peace in the region".

"We disagree with the US decision to move its embassy to Jerusalem and recognise Jerusalem as the Israeli capital before a final status agreement," she said. May also added that the British Embassy to Israel is based in Tel Aviv and there were no plans to move it to Jerusalem.

Israeli president Benjamin Netanyahu has praised Donald Trump and has urged other leaders to do the same.

This is a historic day. Jerusalem has been the capital of Israel for nearly 70 years. Jerusalem has been the focus of our hopes, our dreams, our prayers for three millennia. Jerusalem has been the capital of the Jewish people for 3,000 years. Thank you, @realDonaldTrump! 🇮🇱🇺🇸 pic.twitter.com/mWCUpUMpiC

— Benjamin Netanyahu (@netanyahu) 6 de diciembre de 2017

On the other hand, Mahmoud Abbas, the president of Palestine accused Donald Trump of not being impartial and has taken the announcement as declaration from the United States to retire from the task of sponsoring peace between the two countries.

“These condemned and unacceptable measures are a deliberate undermining of all efforts exerted to achieve peace and represent a declaration of the United State's withdrawal from undertaking the role it has played over the past decades in sponsoring the peace process,” said Abbas

Palestine’s chief delegate to Washington, Husam Zomlot, had a similar opinion and thought that recognizing Jerusalem as capital of Israel was a “stab in the back”.

Strikes and protests have broken out in different parts of the region. According to Reuters, in one Palestinian refugee camp in Jordan, hundreds were chanting anti-American slogans. The Palestinian Islamist group, Hamas, has taken this statement as a “flagrant aggression against the Palestinian people”.

From a financial perspective, markets have remained sanguine so far, observed Hussein Sayed, chief market strategist at forex broker FXTM.

"Despite many warnings from Arab and European leaders that the move would have dangerous consequences, financial markets seem to have ignored the risks for now.

"However, the upcoming days may see increased tensions between the Muslim world and Trump’s administration, which could lead to risk aversion. The move will undoubtedly undermine Israeli-Palestinian peace efforts, and likely strain the U.S. relationships in the Middle East.

"Some investors might start worrying about war breaking out, leading to a surge in oil prices, but so far, the markets’ reaction does not seem to be reflecting this risk."