Australia’s treasurer on Friday said Malaysian Prime Minister Mahathir Mohamad had a history of anti-Jewish statements in an escalating war of words over the possibility Australia might move its embassy in Israel from Tel Aviv to Jerusalem.

Australian Prime Minister Scott Morrison first proposed the move during a local election campaign last month, sparking concern from Indonesia and Malaysia.

Mahathir, 93, raised the potential relocation in a meeting with Morrison in Singapore on Thursday, later telling reporters he feared it could increase the threat of attacks.

“I pointed out that in dealing with terrorism, one has to know the causes,” Mahathir said. “Adding to the cause for terrorism is not going to be helpful.”

Australian Treasurer Josh Frydenberg responded saying Canberra would make its own decisions, and pointing out the Malaysian leader’s past comments about Jewish people.

“He has called Jews ‘hooked-nosed people’. He has questioned the number of people that have been killed in the Holocaust. He banned Schindler’s List as a movie being shown,” Frydenberg, the son of a Holocaust survivor, told reporters in Melbourne.

Challenging history

In an interview with the BBC last month, Mahathir said “the problem in the Middle East began with the creation of Israel”, and he defended his description of Jews as “hook-nosed” in his book The Malay Dilemma.

“They are hook-nosed,” he told the BBC. “Many people called the Malays fat-nosed. We didn’t object.”

Mahathir also challenged historical accounts that six million Jews were killed in the Holocaust, saying the figure was four million.

The film Schindler’s List was banned in 1994 with Malaysia’s film board rejecting it as Zionist propaganda.

When asked by The Associated Press in an August interview about his past comments about Jewish people, Mahathir said: “We should be able to criticise everybody.”

“Anti-Semitic is a term that is invented to prevent people from criticising the Jews for doing wrong things,” he said.

Two-state solution

The possibility that Australia may follow the United States’ contentious move and relocate its embassy to Jerusalem from Tel Aviv has been seen by many Australians as a political stunt. Critics called it a cynical attempt to win votes in a by-election last month for a Sydney seat that is home to a large number of Jewish people.

But on Friday, Frydenberg insisted that shifting the embassy made sense although it has also inflamed tensions with Indonesia, Australia’s closest neighbour with the world’s largest population of Muslims.

“Australia already recognises Israel’s sovereignty over West Jerusalem,” Frydenberg said. “It’s where the Israeli parliament is. It’s where the Australian ambassador presents his or her credentials. It will be the capital of Israel under any two-state solution.”

Morrison said a decision on the embassy would be made by Christmas but rejected fears the plan had caused collateral damage by placing in jeopardy a proposed free trade agreement with Indonesia.

“I do not conflate the issues,” Morrison told ABC radio in Australia.

“What we need to understand is that Australia has to set its own foreign policy, and all I have said is that we would consider this question if we believed that it would advance the issues of the two-state solution.”

Indonesian opposition politician Dian Islamiati Fatwa also warned this week that Australia moving its embassy may provoke attacks in his country.