Trump explicitly stated that the US is not making any decisions on borders of an East and West Jerusalem, or a final status agreement of the city.
President Donald Trump on Wednesday recognized Jerusalem as the capital of Israel in a speech from the White House and said he would move the US embassy from Tel Aviv to the holy city.
Recognizing Jerusalem as Israel's capital and moving the US embassy were both among Trump's campaign promises, and change decades of US policy in the Middle East.
Trump said that the US is not making any decisions on borders of an East and West Jerusalem, or a final status agreement of the city, which has long been considered to be determined by negotiations.
"Jerusalem is a place for Jews to pray at the Western Wall and Muslims to pray at the Al-Aqsa mosque," Trump said.
While East Jerusalem, including the historic Old City, has been under Israeli control since 1967, Palestinians view it as the capital of any future state.
Trump said that past practices have not brought the region closer to a peace deal between the Israelis and the Palestinians. He specifically cited a six-month waiver on moving the embassy that every US president has signed since 1995.
"After more than two decades of waivers, we are no closer to a lasting peace agreement between Israel and the Palestinians," Trump said.
"It would be folly to assume that repeating the exact same formula would now produce a different or better result," he added.
After his speech, Trump signed a proclamation recognizing Jerusalem as Israel's capital, as well as the waiver delaying the move another six months.
Israel's Prime Minister Benjamin Netanyahu said Trump's recognition of Jerusalem as the country's capital marks a "historic day" and is an "important step toward peace."
The Arab world, as well as many US allies in Europe, warned against the move. The US is now the only country besides Israel to recognize Jerusalem as the country's capital.
Protests and flag burnings followed reports earlier this week of Trump's decision, and the region is now bracing for potential violence.