Israel's Prime Minister Benjamin Netanyahu speaks during the Christian Media Summit in Jerusalem
JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu said on Monday that Australia was considering recognizing Jerusalem as Israel's capital.
The status of Jerusalem is one of the thorniest obstacles to a peace deal between Israel and the Palestinians. Israel regards all of the city, including the eastern sector that it annexed after the 1967 Middle East war, as its capital.
Last December, U.S. President Donald Trump reversed decades of U.S. policy by recognizing Jerusalem, enraging the Palestinians and upsetting the Arab world and Western allies.
A statement issued by Netanyahu's office said he had spoken to Australian Prime Minister Scott Morrison by phone on Monday, and that Morrison had said he was "considering official recognition of Jerusalem as Israel's capital, and moving its embassy there".
No comment was immediately available from Morrison's office.
The U.S. Embassy became the only foreign embassy in Jerusalem in May, and Guatemala and Paraguay followed Washington's lead days later and also moved their embassies, although Paraguay returned its mission to Tel Aviv last month. Israel closed its embassy in Asuncion in response.
The Palestinians, with broad international backing, want East Jerusalem as the capital of a future state that they hope to establish in the occupied West Bank and the Gaza Strip. Peace talks between the parties broke down in 2014.
Netanyahu has attempted to persuade other countries to move their embassies to Jerusalem.
The Australian newspaper Sydney Morning Herald quoted Morrison on its website as saying the question of recognizing Jerusalem "was something he would "discuss ... further with cabinet colleagues in the coming months".
It also quoted him as saying that former Australian ambassador to Israel Dave Sharma had made a strong case that the move would not compromise the eventual creation of a Palestinian state, which Australia supports.
(Writing by Ori Lewis; Editing by Kevin Liffey)