(CNN) At the UN General Assembly in September, US President Donald Trump and Palestinian President Mahmoud Abbas made a joint appearance before the world's media.

Abbas, President of the Palestinian Authority since 2005, said that their meeting showed the US administration's seriousness "to achieve the deal of the century in the Middle East during this year or in the coming months."

Trump said: "I certainly will devote everything within my heart and within my soul to get that deal made."

Some 76 days later, that deal could well be dead. Trump's decision to recognize Jerusalem as Israel's capital and move its embassy there from Tel Aviv has, in Palestinian eyes, expired Washington's role as the essential broker of any peace settlement.

That role goes back 40 years to the Camp David Accords that brought about a peace treaty between Egypt and Israel and called for the introduction of Palestinian self-government in the West Bank and Gaza.

Soon after the Gulf war in 1991, President George H W Bush convened a summit of Arabs and Israelis in Madrid. Meanwhile, in secret, the "Oslo" process was underway , which led to a historic handshake on the White House lawn between the then Israeli Prime Minister Yizhtak Rabin and Chairman of the Palestinian Liberation Organization, Yasser Arafat.

In 2000, President Clinton sequestered then Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat at Camp David for two weeks in an effort to reach an over-arching deal.

"In the end all of these core issues fit together like a mosaic, like a puzzle and you can't separate out one piece or another," he said in 2014."The last pieces may decide to fall into place, or may fall on the floor, and leave the puzzle unfinished."

They fell on the floor.

The current US administration has shown an unorthodox approach to the issue, even before this announcement. Trump has appeared lukewarm on the two-state solution -- the bedrock of US policy for years. "The United States would support a two-state solution if agreed to by both sides," he said on Wednesday.

Policy-making has been split between the State Department and the President's son-in-law, Jared Kushner. Kushner said earlier this month: "It's not a conventional team," pointing out that it included bankruptcy and real estate lawyers.

Last weekend, Kushner said of a peace agreement between Israel and the Palestinians: "If we're going to try to create more stability in the region as a whole, you have to solve this issue."

Surely, some might say, the Israel-Palestinian dispute can be addressed regardless of where the US embassy sits.

Shimon Peres signs the Oslo Accords at the White House as Yitzhak Rabin, President Bill Clinton and Yasser Arafat look on.

The short answer is no. So sensitive and emotive is the status of Jerusalem -- and especially its Old City where the holy sites are concentrated -- that successive negotiations have put it to one side.

The Palestinians see east Jerusalem -- occupied by Israel in the 1967 war and then annexed -- as the capital of their future state. To the vast majority of Israeli Jews (92% in a 2015 poll) Jerusalem is the eternal capital of the Jewish state.

Some Palestinian officials suspect that the White House has a bigger deal in mind, building a coalition between the Gulf monarchies and Israel in an historic realignment -- with Iran as the common enemy and the Palestinians as an afterthought.

That's an indication of the changing dynamics in the region. Once the Palestinian issue was sacrosanct for the Arab cause and Yasser Arafat its champion.

Now Palestinian loyalties (and territory) are split between Arafat's Fatah movement and Hamas. So are broader Arab loyalties: Qatar's support for Hamas and the Muslim Brotherhood is one of the reasons for its confrontation with Saudi Arabia and the other Gulf states.

The Arab world -- especially Saudi Arabia, Jordan, the United Arab Emirates and Egypt -- now have a greater preoccupation: Iranian expansionism in Iraq, Lebanon, Syria and Yemen.

Even so, this sudden decision on Jerusalem has upset and disturbed everyone from King Salman of Saudi Arabia to King Abdullah of Jordan and President Recep Tayyip Erdogan of Turkey -- the sort of allies Washington needs if it is to build support for whatever peace plan it might be working on.

That's because Jerusalem is seen as more than just an issue about Palestinian sovereignty. It is about Arab identity and Muslim identity too.

They see the move of the US embassy in Israel to Jerusalem as empowering the very militancy they are confronting. Palestinian Prime Minister Rami Hamdallah says the move "will fuel conflict and increase violence in the entire region."

At their September meeting in New York, Mahmoud Abbas turned to President Trump and said: "Mr. President, we count on you."

Now the Palestinians have no one to count on. Some say that so long as President Trump and Prime Minister Netanyahu are in power, that's not going to change.