The United States has formally recognised Jerusalem as the capital of Israel.
U-S President Donald Trump has also directed the U-S State Department to move the U-S embassy in Israel to Jerusalem from Tel Aviv.
He acknowledged there will be disagreement and dissent on the announcement but said it marks the beginning of a new approach to the Israel-Palestinian conflict.
Many in the international community have warned the U-S move could threaten peace in the Middle East.
But Mr Trump says delays by previous U-S Presidents on recognising Jerusalem haven't brought lasting peace either.
French President Emmanuel Macron says he does not support Donald Trump's "unilateral" decision.
Turkey's foreign ministry has called the move "irresponsible", while Jordan's king, King Abdullah, says the move could lead to more extremism.
But Israeli Prime Minister Benjamin Netanyahu says the key to peace is the recognition of Jersualem as the Israeli capital.
He has thanked Mr Trump for the decision- and urged other countries to do the same as the U-S.
Julie Bishop says Australia will not be changing its policy.
