CANBERRA, Australia _ Australia will formally recognize Jerusalem as the capital of Israel, following the lead of key ally the United States, the Weekend Australian reported.
Prime Minister Scott Morrison is set to reveal the decision on Saturday during a speech to the Sydney Institute in a move he said was aimed at advancing the stalled Middle East peace process. Australia will establish a defense and trade office in Jerusalem, although moving the nation's embassy to the city from Tel Aviv will be delayed until the status of the city is determined under a peace settlement, the newspaper reported.
"We have decided to start the work now" to identify a suitable site for an Australian embassy in West Jerusalem, Morrison will say in his speech, according to the Australian.
Morrison will also reveal the outcome of a review on Australia's policy position on the Iran nuclear deal, retaining support but flagging the possibility of "autonomous sanctions" over Iran's sponsorship of terrorism in the Middle East, the report said.
When Morrison said in October that he was considering an embassy switch, the announcement was welcomed by Israeli Prime Minister Benjamin Netanyahu but lambasted by Muslim-majority nations in Southeast Asia. Indonesia put an imminent free-trade deal with Australia on ice, while Malaysia Prime Minister Mahathir Mohamad said it could add to the causes of terrorism.
The Indonesian government has been briefed about Canberra's decision, the Australian reported.
World leaders from the Vatican to Tehran denounced President Donald Trump's decision to relocate the U.S. embassy from Tel Aviv. The contentious inauguration in May, timed to coincide with the 70th anniversary of Israel's independence, escalated clashes between Israeli troops and Palestinians in the Gaza Strip.
It's not clear whether Morrison intends to announce funding for the embassy switch before Australian elections expected in May. The main opposition Labor Party, which polls show is on track to win power, doesn't support the move as it says Jerusalem's status should be determined as part of an overall two-state solution.
Australia and Indonesia in August concluded talks that began in 2010 on a free-trade deal.
Australian Trade Minister Simon Birmingham last month signaled Canberra wasn't likely to succumb to pressure from Indonesia, which suggested it wouldn't sign a negotiated free trade deal as long as Australia was considering moving its Israeli embassy to Jerusalem.
In 2017, two-way trade of goods between the nations totaled A$11.2 billion ($8 billion), making Indonesia Australia's 14th-largest trading partner.
