Nic Robertson is CNN's international diplomatic editor. The opinions in this article belong to the author.

(CNN) At ground zero, by Jerusalem's Old City walls, reaction to President Trump's declaration that the United States now recognizes the city as being Israel's capital is both mixed and muted.

A small group of Palestinian women sat chanting outside the ancient Damascus Gate and youths who in other cities might be described as feral baited police, in an almost ritualized ebb and flow of bravado.

There was no violence and Israel Police spokesman Micky Rosenfeld told me the gathering was "relatively small ... we've dealt with much larger."

He would be there again Friday as Palestinians streamed home following their most important prayers of the week. It was the moment many had feared could turn to ugly violence.

It didn't. The vast majority of people left peacefully. Perhaps a hundred teenagers stopped to chant in anger, later tangling with police as they were moved on. In the same place six months ago, the police coped with far bigger and much more violent crowds.

If Rosenfeld was surprised at the low turnout, he didn't show it. He told me that the police were still evaluating what may come in the days ahead.

I was puzzling over other conversations I'd just been having. Educated, articulate Palestinians describing to me both their frustration with their own leadership and their anger with Trump.

Nearly 25 years after the first Oslo peace accords held out hope of a two-state solution, we have little to show for it, one middle-class 30-something man told me. He said that Palestinians need new leaders and a new approach.

He singled out Palestinian Authority President Mahmoud Abbas as being particularly weak.

A 45-year-old woman was angry with Trump. She told me she grew up in the Old City, that he didn't understand the impact of his decision and that he cared only about his popularity back home.

What struck me most, however, was that while Trump is viewed back in the United States as a polarizing leader -- praised by some, reviled by others -- these Palestinians saw him as the true face of America. They say that Trump is finally revealing the true America that previous presidents had managed to hide.

No matter how much I countered that Trump's election victory was a close-run thing and more than half the people who voted didn't pick him, they were unshakable in their view: Americans are fundamentally pro-Israeli, anti-Arab and anti-Muslim.

Trump's rationale that moving the US Embassy from Tel Aviv to Jerusalem was merely a reflection of on-the-ground realities -- most key Israeli government buildings being in Jerusalem -- seemed to have found a mirror among the Palestinians I talked to. For them, Trump had merely confirmed their own views of what was happening in Jerusalem.

The question is, does this make peace negotiations between Palestinians and Israelis harder or easier?

Much will depend on what happens in coming days.

Hamas has called for an intifada, and there have already been at least four rockets fired from Gaza into Israel. Israel returned fire at what the Israel Defense Forces describe as Hamas targets; two people were killed by the airstrikes, the Palestinian Health Ministry said.

Protests in the West Bank and Gaza, unlike Jerusalem, were more heavily attended and did turn violent and deadly when two Palestinian men were fatally shot in Gaza. The IDF said it "fired selectively towards dozens of main instigators and hits were confirmed."

Seven people were arrested during the clashes on Salah el-Din Street in Jerusalem, Israel Police spokesman Rosenfeld said, adding later via Twitter that four officers were slightly injured by stones and 13 protesters were arrested at the Damascus Gate area.

The Palestinian Red Crescent said Saturday it had treated 231 people injured in the West Bank, Jerusalem and Gaza -- including 12 wounded by gunshots, 24 hit by rubber bullets and 172 who inhaled tear gas.

However, in contrast to protests and clashes in previous years, these have been of smaller and lower intensity.

Around the world, many leaders criticized Trump, while some seasoned observers were left wondering why the zeal for a protracted escalation was apparently absent.

JUST WATCHED Tense scene in West Bank after Trump decision Replay More Videos ... MUST WATCH Tense scene in West Bank after Trump decision 01:53

Yet, however uncomfortable this may feel to the Palestinians, the decision over what to do next does seem to be in their court.

Israel, as Rosenfeld told me, is ready whatever transpires: "If there'll be any local incidents, any small-scale incidents, we'll deal with them as well as large-scale incidents."

Either by design or default, Trump has orchestrated a moment of realpolitik. It may also be a huge gamble.

Even if Palestinian peace negotiators do blink at what so many of them consider to be a major provocation by a now-discredited partner in the peace process, others may not.

Iran's proxy, Hezbollah, met with Hamas on Thursday, hinting it is ready to meddle more heavily than it has recently in Israeli-Palestinian politics.

Finding common cause with Palestinians has always been a way for Iran to needle Israel.

On this occasion, Hassan Nasrallah, Hezbollah's leader, appears to be calibrating his spike, calling for a social media campaign, diplomatic pressure and protests -- not violence -- to cause the Israelis and the United States pain.

Everyone is treading carefully, not least Trump and Israeli Prime Minister Benjamin Netanyahu. Both were at pains to say Trump's decision changes nothing on the ground.

"We are not taking a position of any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem," Trump said. "I call on all parties to maintain the status quo at Jerusalem's holy sites," he said, importantly stating a two-state solution is still an option.

Netanyahu, in a recorded message soon after, made his own commitment: "There will be no change whatsoever to the status quo at the holy sites. ... Israel will always ensure freedom of worship for Jews, Christians and Muslims alike."

Both men have credibility issues with the audiences they are trying to reach, but it doesn't change the realpolitik of the situation. That's their line and they've agreed to it.

Islam's third holiest site, the Al-Aqsa Mosque, is in Jerusalem. Had Trump specifically said all of Jerusalem was Israel's capital, many in the region feared it could have energized groups like ISIS and al Qaeda that Trump is striving to defeat.

But perhaps Trump's bigger problem in bringing peace to the Middle East is the good will he is eating up with his allies.

Many of them told him not to take this decision now and have very publicly rebuked him since.

It's hard to find a single diplomat who thinks now was the time to press ahead. Jerusalem is the ultimate carrot in any peace negotiation. Its fate is the prize at the end of arduous negotiations.

For Palestinians right now, it feels like a stick: the ultimate rod to ruin any illusion that this President cares about them, their aspirations or their place in the world.

The greater the gap Trump opens between himself and longstanding US friends, the less leverage he'll have over his enemies.

JUST WATCHED Why US State Department vacancies are a big deal Replay More Videos ... MUST WATCH Why US State Department vacancies are a big deal 03:18

Trump, it seems, does not have that in mind. He has become both a bull in a china shop and a matador at the same time: wantonly breaking diplomatic crockery while prodding and goading erstwhile allies and friends.

That Trump has given what so many Israelis have desired for so long cannot and should not be overlooked. It is hugely important that one of the world's superpowers has their back. Yet it would be an unforgivable error if a safe homeland for Jews became less safe as a result.

Whatever happens now, Trump cannot stand apart from his decision, its implications and impact. The warnings were there.

So to that question, does his decision make peace more likely?

It depends what other moves he has. Does he plan to turn political capital he has garnered with Israeli politicians into leverage over them?

Might he turn the high praise he received -- Netanyahu called him courageous -- into a demand for concessions no American president has been able to eke out of an Israeli prime minister in the past?

Reports are also circulating that Trump's Saudi allies -- King Salman and his son, Crown Prince Mohammed bin Salman -- have told Abbas he needs to dial back his expectations on a peace deal.

But Abbas is getting weaker. His condemnation of Trump's announcement paled next to that of his senior deputies and looks positively pedestrian next to Hamas' call for an uprising.

The problem for peace right now is that mainstream Palestinian leadership is led by the mood on the street. How protests go will set the political course.

Trump has rolled the dice, and when the heat surrounding his throw subsides, the odds that such an unlikely outsider can make a difference will be known.