Donald Trump is likely to announce next week that the US will recognise Jerusalem as the capital of Israel, a move that upends 50 years of US Middle East policy and is likely to inflame relations with the Palestinians and America’s Arab allies.

White House officials said Mr Trump would probably make the announcement in a speech on Wednesday but that a final decision had not yet been made.

The status of Jerusalem has long been one of the most sensitive subjects of the Israeli-Palestinian conflict. The city holds significance to Muslims across the world because it is home to the al-Aqsa mosque, Islam’s third holiest site.

US presidents since Harry Truman have refused to recognise Jerusalem as Israel’s capital and said that its final status must be settled through negotiations.

Bill Clinton, George W Bush and Barack Obama have all supported the idea of a two-state solution - which would likely include dividing Jerusalem so it could be a capital for both Israel and Palestine - but Mr Trump has so far not committed to the two-state model.

US allies such as King Abdullah of Jordan have long warned that any unilateral American moves on the status of Jerusalem could spark violent protests among the Palestinians and across the Arab world. Saudi Arabia has also lobbied the US not move ahead.