An expected announcement by President Donald Trump that the US will become the first country to recognise Jerusalem as Israel's capital has been dubbed a "kiss of death" for the Middle East peace process by the Palestinians.
But an Israeli minister urged other countries to follow the US lead.
Mr Trump is expected to confirm the decision in a speech later.
He will also approve moving the US embassy from Tel Aviv to Jerusalem, US officials say.
This could, however, be delayed because of logistical and security issues, as well as the need to find a location.
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