WASHINGTON—The Trump administration is considering a plan to formally recognize Jerusalem as the capital of Israel and to move the U.S. Embassy there in the future, U.S. officials said, steps that could trigger Palestinian protests and imperil the restart of a long-stalled peace process.

The Trump administration this week notified U.S. embassies overseas about the plan and a possible forthcoming announcement so envoys can inform their host governments and prepare for possible protests.

Officials said the plans weren’t final, however, and the U.S. was working through additional legal and policy considerations. A formal announcement could come as early as next week, the officials said.

“The president has always said it is a matter of when, not if,” a White House spokesman said when asked about moving the embassy. “The president is still considering options and we have nothing to announce.”

Officials said the administration is mulling laying out a long-term plan to move the embassy that would play out in President Donald Trump’s second term, should he be re-elected.