The US Supreme Court agreed Monday to take up a case that could greatly complicate the delicate Middle East peace process in a legal challenge to the US State Department’s policy of neutrality over the disputed status of Jerusalem.

The case arises out of a clash between Congress and the White House over which branch of government is empowered to decide how best to conduct sensitive issues of diplomacy overseas.

In addition to fundamental questions concerning the separation of powers within the US government, the case involves an example of the president issuing a signing statement announcing his intent not to enforce a portion of a law passed by Congress.

At the center of the case is the thorny question of how to record the birth of a child to American citizens when the happy event takes place in Jerusalem.

When a child is born to American citizens in Jerusalem, US government protocol is to list the place of birth as simply “Jerusalem.”

It is done for diplomatic reasons, to avoid having to take sides between competing Arab and Israeli claims to the holy city.

Congress, on the other hand, has eschewed such diplomatic niceties. In September 2002, it passed a law directing the State Department – whenever requested – to record a birth in Jerusalem as having taken place in “Israel.” The congressional action sparked protests and condemnation in the Middle East among those who interpreted the new law as a shift from a long-held US position.

The status of the city of Jerusalem is one of the most difficult and sensitive issues in the quest for peace between Arabs and Israelis.

Palestinians maintain that Jerusalem is an indivisible part of Arab lands they recognize as Palestine. Israelis counter that Jerusalem is not only an Israeli city, but Israel’s capital.

The US diplomatic corps, seeking to maintain credibility as a mediator in the peace process, has remained neutral on the issue.

Into this delicate diplomatic dance came the infant child of Ari and Naomi Zivotofsky. The child, identified in court papers as MBZ, was born Oct. 17, 2002, in Jerusalem. When the boy’s mother applied for documents verifying the birth abroad of a US citizen, she asked that the certificate reflect that the birth occurred in “Jerusalem, Israel.”

State Department officials pointed out that, for political and diplomatic reasons, US policy is to record the place of birth as simply “Jerusalem.”

The parents filed a lawsuit asking a federal judge to order the US government to list the birthplace of their son on official documents as “Jerusalem, Israel.” They noted that in September 2002, a month before the birth, Congress had passed the law instructing US officials to list the place of birth as Israel.

It is that dispute that the Supreme Court has agreed to decide. At issue is whether US officials must comply with the congressional action or, instead, enforce the diplomatic protocol favored for the past 60 years by all presidents.

The child, Menachem Binyamin Zivotofsky, is now eight years old.

The law in question is a provision of the Foreign Relations Authorization Act for fiscal year 2003. The relevant portion of the law is entitled “United States Policy with Respect to Jerusalem as the Capital of Israel.”

President Bush signed the Authorization Act into law but simultaneously issued a signing statement to emphasize that US policy regarding the status of Jerusalem had not changed. Bush wrote that the congressional mandate would “impermissibly interfere with the president’s constitutional authority to formulate the position of the United States, speak for the nation in international affairs, and determine the terms on which recognition is given to foreign states.”

In the federal court case, government lawyers argued that “if ‘Israel’ were to be recorded as the place of birth of a person born in Jerusalem, such ‘unilateral action’ by the United States on one of the most sensitive issues in the negotiations between Israelis and Palestinians would critically compromise the United States’ ability to help further the Middle East peace process.”

Supporters of the congressional action argue that once Congress passes a law it is up to the executive branch to faithfully uphold and enforce it. They say Congress has the authority to undertake a policymaking role in foreign affairs.

A federal judge threw out the Zivotofskys’ case, ruling that the issue is a political question related to an aspect of foreign affairs that is constitutionally assigned to the executive branch of government. An appeals court panel affirmed the decision.

In agreeing to take up the case, the high court asked the parties to also address whether the 2002 congressional mandate “impermissibily infringes the president’s power to recognize foreign sovereigns.”

The case, MBZ v. Clinton, will likely be scheduled for oral argument sometime in the court’s next term, which begins in early October.