Officials in Canberra say PM could announce as soon as Saturday that his government will recognize Jerusalem as Israel's capital.

Australian Prime Minister Scott Morrison could announce as soon as Saturday that his government will follow US President Donald Trump's lead and recognize Jerusalem as Israel's capital, AFP reported on Thursday night.

According to the report, ahead of the expected announcement, Australia warned citizens to take care while travelling in neighboring Muslim-majority Indonesia.

Scores of Australians preparing to jet off to Bali and other tropical island destinations for upcoming summer holidays should "exercise a high degree of caution", the Department of Foreign Affairs warned.

Officials in Canberra told AFP that, while they expected the announcement to come on Saturday, events could yet alter those plans.

There were conflicting reports this week about the possibility of Australia recognizing Jerusalem as the capital of Israel.

On Tuesday, The Australian reported that the Australian government would formally recognize Jerusalem as the capital city of the State of Israel, but is not planning on relocating its embassy from Tel Aviv in the near future.

Morrison later rejected that report, saying it was too early to discuss such matters and that "when I’m in a position to make that announcement, I will.”

Shortly after he entered office, it was reported that Morrison was weighing the possibility of recognizing Jerusalem as Israel’s capital, as well as the relocation of the Australian embassy in Israel from Tel Aviv to Jerusalem.

He later stressed that he had not yet decided to recognize Jerusalem as Israel’s capital and would hold consultations on the matter, while stressing Australia’s commitment to a two-state solution.