Australian travellers heading to Indonesia for the Christmas season have been urged to exercise a "high degree of caution".
Australia's Department of Foreign Affairs has warned Australian travellers heading to Indonesia to be aware of protest activity in Jakarta.
The warning comes as Prime Minister Scott Morrison confirmed a shift in the Australian government's policy on the Middle East, recognising west Jerusalem as the capital of Israel.
He said however, any relocation of Australia's embassy to Jerusalem would be delayed until a peace settlement in the Israeli-Palestinian conflict.
Palestinian, Israeli groups react
The decision announced on Shabbat - the Jewish day of prayer and rest - was welcomed by Jewish groups with the peak representative body the Executive Council of Australian Jewry (ECAJ) hailing it as "groundbreaking".
A joint statement made by ECAJ President Anton Block and CEOs, Peter Wertheim and Alex Ryvchin said the announcement was "a simple acknowledgement of a reality that has existed since 1950. The Prime Minister deserves credit for resisting pressure from many quarters against taking even this modest step”.
"Recognising that Israel’s seat of government is located in the western part of the city, which is incontestably sovereign Israeli territory, does not in any way impact upon or pre-judge the future status of the contested eastern and other parts of the city captured by Israel in 1967”, they said.
"The Prime Minister noted that Jerusalem’s ultimate status, including its borders and boundaries, is a final status issue to be resolved between the parties."
The Palestinian ambassador in Australia, Izzat Abdulhadi, said the decision to delay the embassy move provided a constructive base on which to reverse the Australian foreign policy position in the future.
“The Australian plan to create a defence and trade centre in Jerusalem has no diplomatic significance and therefore, it’s a good starting point to hopefully cancelling the plan of moving the embassy altogether," he told SBS Arabic24.
He added that Mr Morrison's framing of the issue as recognising East and West Jerusalem in line with the two-state solution does not square with the official Israeli position.
“Israeli annexation of East Jerusalem in 1980 is a violation of the international law. That’s why the international community and European countries, in particular, are united on the issue and do not recognise west Jerusalem as Israel’s capital.”
Australian travellers warned to exercise caution
Demonstrations have been held in recent weeks around the Australian Embassy in Jakarta and the Australian Consulate-General in Surabaya," DFAT's SmartTraveller posted in a message on social media.
"Exercise a high degree of caution in Indonesia, including in Bali, Surabaya and Jakarta, because of the high threat of terrorist attack. Pay close attention to your personal security at all times.
"Avoid protests, demonstrations and rallies, which can turn violent without warning. Demonstrations have been held in recent weeks around the Australian Embassy in Jakarta and the Australian Consulate-General in Surabaya. Protests may continue at the Embassy in Jakarta or at any of Australia’s Consulates-General in Surabaya, Bali and Makassar. Be aware of your surroundings."
The President of the Indonesia Institute Inc, Ross Taylor, criticised Scott Morrison's handling of the issue.
"Morrison's timing & handling of the Jerusalem Embassy issue has been atrocious," he said in a message posted on Twitter.
"His new policy, to be announced today, is as reasonable an outcome he could have expected. The response from Indonesia however, will be watched closely."
He said early elections next year would add to the volatility in the bilateral relationship.
"This issue has been handled very badly by Morrison. And the timing - as both Oz and Indo prepare for tough national elections - was dreadful. The announcement today is about as good a policy ScoMo could expect. And now it's over to Indonesia."
Trade deal on the line
Indonesia has delayed finalising its free trade deal with Australia ever since Prime Minister Scott Morrison first announced he was considering moving the Australian embassy from Tel Aviv to Jerusalem.
The deal has taken eight years to negotiate and would be worth $16 billion a year to Australia.
In November, Indonesia's Trade Minister Enggartiasto Lukita cited "Australia's position [on the embassy]" as the reason for delaying the signing of the Indonesia Australia Comprehensive Economic Partnership Agreement.
The proposal was first raised by Mr Morrison two months ago during the final days of campaigning in the Wentworth by-election where more than 12 per cent of voters are Jewish.
Foreign Marise Payne has visited Indonesia since then to smooth over tensions.
Indonesia Muslim groups earlier this month warned against any move by Australia to recognise Jerusalem as the Israeli capital, vowing that mass protests and a boycott of Australian goods would follow.
Indonesia’s 212 Brotherhood and firebrand Islamic Defenders Front (FPI) said it would put pressure on the Indonesian government to encourage Australia to reverse any decision to recognise Jerusalem as Israel's capital.
“This is an outright recognition of Israel’s claim for Jerusalem, Islam’s third-holiest city and the home of the Al Aqsa mosque,” FPI spokesman Novel Bamukmin told The Australian.
The country with the world's largest Muslim population, Indonesia is a strong ally of the Palestinian territories and has repeatedly voiced concerns over Australia's embassy proposal.