President Donald Trump announced Wednesday that the U.S. recognizes Jerusalem as Israel's capital and that the American Embassy will be moved there, risking a huge backlash from across the Muslim world.

"That city is Israel's capital," Trump said at the White House. "It is time to officially recognize Jerusalem as the capital of Israel."

Trump said the U.S. will build an American embassy in Jerusalem, where it currently maintains a consulate. The current U.S. embassy is in Tel Aviv, where most other countries' embassies are maintained.

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

Trump acknowledged that his decision was driven by a political campaign pledge, saying that "while previous presidents have made this a major campaign promise, they failed to deliver. Today, I am delivering."

The president went on to say that his decision "is not intended in any way" to hamper a lasting peace agreement between Israel and the Palestinians. He said the United States would "support a two-state solution if agreed to by both sides."

While welcomed by Israel, Trump's decision has already angered leaders across the Arab world, who warned the president that his decision would effectively doom any future peace negotiations and could further destabilize the entire Middle East.

"Peace is never beyond the grasp of those willing to reach for it," Trump said. "So today, we call for calm, for moderation, and for the voices of tolerance." He added: "Our children should inherit our love, not our conflicts."

Until the 1967 war, Jerusalem was divided between Israel and Jordan. The western part housed the seat of Israel's government. During the war, Israel captured the eastern part, which house sites sacred to Jews, Muslims and Christians. Palestinians consider the eastern sector the rightful capital of any future Palestinian state.

Trump said he would immediately begin the process of designing and building a new U.S. embassy in Jerusalem. Upon completion, he said, it "will be a magnificent tribute to peace."