The Israeli government says Prime Minister Scott Morrison made a mistake when he formally recognised only west Jerusalem as Israel's capital.
Mr Morrison has announced his Government will recognise east Jerusalem as Palestine's capital if a settlement on a two-state solution is reached and will only then consider moving Australia's Israeli embassy from Tel Aviv to West Jerusalem.
Israeli Minister for Regional Cooperation Tazachi Hanegbi says Mr Morrison was wrong to label only west Jerusalem as Israel's capital.
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