President Trump on Wednesday recognized Jerusalem as Israel's capital and announced plans to relocate the U.S. Embassy there, a decision that could inflame tensions in the region and throw a wrench in potential peace negotiations.

"I have determined that it is time to officially recognize Jerusalem as the capital of Israel," Trump said during a speech in the Diplomatic Reception Room of the White House.

Trump, who has vowed to broker a historic peace accord between Israel and the Palestinians, declared he will try to resolve one of history’s oldest conflicts his way, arguing that past approaches, such as delaying the recognition, have not worked.

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“It would be folly to assume that repeating the exact same formula would now produce a different or better result,” he said, calling his announcement “a long-overdue step to advance the peace process and work towards a lasting agreement.”

Trump said the U.S. is simply acknowledging “the obvious” that Jerusalem is the seat of Israel’s government, even though the city’s status is arguably the most contentious issue of the decades-long Israel-Palestinian conflict.

"This is nothing more or less than a recognition of reality. It's also the right thing to do. It's something that has to be done,” he said.

Trump also directed the State Department to begin the process of moving the U.S. Embassy from Tel Aviv to Jerusalem as mandated by a 1995 law that has been waived by the past three presidents on national security grounds.

But U.S. officials say the move could take years to complete and Trump signed the embassy waiver, which officially puts off the move for another six months.

Nonetheless, Trump's announcement is his boldest foray yet into the Middle East.

The peace effort, which is being led by Trump’s son-in-law and senior adviser Jared Kushner, has gotten off to a slow start, and Arab and European leaders warned that formally recognizing Jerusalem as Israel’s capital would push the talks further off track

Trump defied those warnings, showing his inclination to prioritize domestic politics and his own instincts over the desires of U.S. allies in the region.

The president acknowledged his announcement is an effort to make good on a promise he made during the 2016 campaign, which excited his pro-Israel and evangelical Christian supporters.

"While previous presidents have made this a major campaign promise, they failed to deliver," the president said. "Today, I am delivering."

Trump made the announcement in festive surroundings — the Diplomatic Reception Room was covered in Christmas decorations. Sitting beside Vice President Pence, who argued for the move, he signed a proclamation and held it up for the cameras.

Both men wore white shirts with blue ties — the colors of the Israeli flag.

Israeli Prime Minister Benjamin Netanyahu lauded the recognition as a “historic day” that is an “important step toward peace.”

But the mood was darker in the Arab world and in European capitals, where officials fear the potential for violence in response to Trump’s announcement.

The militant Palestinian Islamist group Hamas said Trump’s decision “opens the gates of hell.” It has called for several days of protests in the Holy Land.

The U.S. embassy in Jordan warned of potentially violent demonstration and urged American personnel to keep their children home from school.

European leaders, meanwhile, questioned Trump’s decision to reverse the United States' longstanding neutral stance on the status of Jerusalem.

"We believe it is unhelpful in terms of prospects for peace in the region," said British Prime Minister Theresa May.

May said the U.K. will keep its embassy in Tel Aviv.

Trump said he remains “deeply committed” to brokering a peace deal. He acknowledged there “will of course be disagreement and dissent regarding this announcement,” but called for calm in the region.

Jerusalem is home to holy sites important to Jews, Christians and Muslims alike, and control over the city has long been a sensitive issue.

East Jerusalem was captured by Israel in the 1967 Six-Day War, unifying the city under Israeli control. A Muslim-controlled entity governs the top of the Temple Mount, which is the holiest site in Judaism and the third-holiest site in Islam.

Jerusalem is home to Israel's parliament and prime minister’s residence, but Palestinians have demanded the eastern part of the city be set aside as a capital for a future state.

Trump said his announcement does not change the status quo.

“We have consulted with many friends, partners, and allies in advance of the President making his decision,” Secretary of State Rex Tillerson Rex Wayne TillersonGary Cohn: 'I haven't made up my mind' on vote for president in November Kushner says 'Alice in Wonderland' describes Trump presidency: Woodward book Conspicuous by their absence from the Republican Convention MORE said in a statement. “We firmly believe there is an opportunity for a lasting peace.”

Tillerson said the State Department will begin preparations to move the embassy, adding that safety of Americans is the department’s highest priority.

“In concert with other federal agencies, we’ve implemented robust security plans to protect the safety of Americans in affected regions,” he said.

This report was updated at 3:46 p.m.