Australia has recognised West Jerusalem as the capital of Israel.

The decision, announced by prime minister Scott Morrison, follows a similar move by the US last year when President Donald Trump reversed decades of American foreign policy and switched the country’s embassy there from Tel Aviv.

Mr Morrison said Australia would not move its own embassy until a peace settlement between Israel and the Palestinians was achieved.

And he added that his country also recognised the aspirations of the Palestinians for a state with a capital in East Jerusalem.

Mr Morrison’s announcement on Saturday comes after a two month consultation with politicians in Australia and allies abroad.

He said: “Australia now recognises West Jerusalem, being the seat of the Knesset and many of the institutions of government, is the capital of Israel.

“We look forward to moving our embassy ... after final status determination.”

He said that Australia would, in the interim, set up a defence and trade office in West Jerusalem.

The shift follows weeks of controversy following the announcement of the policy review in October.

Gazans protest as US embassy moves to Jerusalem – in pictures Show all 37 1 /37 Gazans protest as US embassy moves to Jerusalem – in pictures Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian mourners carry the dead body of Mukhtar Ebu Hamas, 25, killed by Israeli forces in Gaza on 14 May Getty Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian woman flashes a victory sign during a protest near the border fence AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures Israeli soldiers guard on top of a watch tower along the Israel-Gaza border AP Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian demonstrators react to fired tear gas Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian demonstrators run for cover Reuters Gazans protest as US embassy moves to Jerusalem – in pictures US President's daughter Ivanka Trump and her husband Senior White House Advisor Jared Kushner arrive for the controversial inauguration of the US embassy in Jerusalem. The United States moved its embassy in Israel to Jerusalem after months of global outcry, Palestinian anger and exuberant praise from Israelis over President Donald Trump's decision tossing aside decades of precedent. AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures Palestinians carry a demonstrator injured during clashes AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures US Ambassador to Israel David Friedman speaks during the dedication ceremony of the new US embassy in Jerusalem Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian man walks in the smoke billowing from burning tyres AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures Israeli Prime Minister Benjamin Netanyahu waves as he arrives ahead of the dedication ceremony of the new US embassy in Jerusalem. Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian protesters lying on the floor during clashes Rex Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian protesters burn tires AP Gazans protest as US embassy moves to Jerusalem – in pictures Israel's Prime Minister Benjamin Netanyahu, his wife Sara, Senior White House Advisor Jared Kushner, US President's daughter Ivanka Trump, US Treasury Secretary Steve Mnuchin and US ambassador to Israel David Friedman attend the opening of the US embassy in Jerusalem. AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian man assists a wounded protestor AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian man holding his national flag walks in the smoke billowing from burning tyres AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures US Treasury Secretary Steve Mnuchin and Ivanka Trump unveil an inauguration plaque during the opening of the US embassy in Jerusalem AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures Palestinians carry a protester injured AFP/Getty Gazans protest as US embassy moves to Jerusalem – in pictures Ivanka Trump and US Treasury Secretary Steven Mnuchin stand next to the dedication plaque at the US embassy in Jerusalem Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian demonstrator uses a sling to hurl stones at Israeli troops during a protest against U.S. embassy Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A female Palestinian demonstrator stands amidst smoke Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Ivanka Trump attends the opening ceremony of the new US embassy in Jerusalem AP Gazans protest as US embassy moves to Jerusalem – in pictures Palestinian medics and protesters evacuate a wounded protester AP Gazans protest as US embassy moves to Jerusalem – in pictures An Israeli soldier aims his weapon at Palestinian demonstrators Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Gazans carry an injured protestor Rex Gazans protest as US embassy moves to Jerusalem – in pictures Protestors gather to demonstrate Reuters Gazans protest as US embassy moves to Jerusalem – in pictures An Israeli soldier fires tear gas at demonstrators Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian demonstrator poses with a slingshot Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Protestors carry tires Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A demonstrator kicks a burning tire Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Palestinians congregate prior to their demonstration against the US moving their embassy to Jerusalem Reuters Gazans protest as US embassy moves to Jerusalem – in pictures Female Palestinian demonstrators react to tear gas fired by Israeli troops Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian demonstrator reacts Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian man throws leaflets dropped by the Israeli military during a protest against the US embassy move to Jerusalem and ahead of the 70th anniversary of Nakba, at the Israel-Gaza border, east of Gaza City Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A boy holds a Palestinian flag as he stands amidst smoke Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian demonstrator tries to put out a fire caused by objects dropped from Israeli drones during a protest against the US embassy move to Jerusalem and ahead of the 70th anniversary of Nakba, in Khan Younis in the southern Gaza Strip Reuters Gazans protest as US embassy moves to Jerusalem – in pictures A Palestinian demonstrator with a slingshot REUTERS Gazans protest as US embassy moves to Jerusalem – in pictures Protesters look up at falling tear gas cannisters dropped by an Israeli drone AFP/Getty

Palestinian leaders spent the past few days lobbying Arab and other Muslim states to drop Australian exports and withdraw their ambassadors from Canberra in the event of an embassy move to Jerusalem. It remains to be seen if any will do so.

Commentators in Australia pointed out how the switch was first floated by Mr Morrison in the week leading up to a by-election in the town of Wentworth – an electorate where 12.5 per cent of the population is Jewish.

But, as part of the announcement, Mr Morrison denied the move had anything to do with domestic politics – and accused the United Nations of antisemitism.

He said: “We regard the biased and unfair targeting of Israel in the UN general assembly in particular, as deeply unhelpful to efforts to build peace and stability. The UN general assembly is now the place where Israel is bullied and where antisemitism is cloaked in the language of human rights.”

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Two other countries, Guatemala and Paraguay, have previously announced they would recognise West Jerusalem, but Paraguay later reversed the decision after a change of government.

The status of Jerusalem is at the heart of the Israeli-Palestinian conflict.