If there's ever going to be meaningful peace between Israel and the Palestinians, the onus is on the Palestinians to make it happen

Former Knesset member Einat Wilf, writing at The Atlantic, provides a much-needed overview of how the world's various interested parties came by their current views of Jerusalem:

Jerusalem was established as the capital of the newly independent state of Israel on December 13, 1949. This was Jerusalem west of the ceasefire line delineated at the end of the war for Israel’s independence, later to be known as the pre-1967 line. This part of Jerusalem included Jewish residential neighborhoods built in preceding decades. There was nothing holy about this part of Jerusalem. By the end of the war the holy and ancient sites were actually east of the ceasefire line: the entire Old City, including the sites holiest to the Jewish people. The Temple Mount, the Wailing Wall, and the Jewish Quarter all came under Jordanian control, and Jews were denied access to these sites.

The United States recognized the State of Israel upon its independence, so it should have been straightforward for the U.S. to recognize Jerusalem as Israel’s capital and to establish its embassy there. If anything, it is the Jordanian annexation of the Old City and the way Jews were denied access that should have led to international consternation (it didn’t).

Why didn’t the U.S. and all other countries recognize residential, non-holy, west-of-the-armistice-line Jerusalem as Israel’s capital? At the time the U.S. was still attached to an idea, proposed in the United Nations partition resolution of 1947, that the vast area of greater Jerusalem (including residential neighborhoods) as well as Bethlehem should be a “Corpus Separatum,” a separate area that would be governed by the international community.

This fiction never existed anywhere but on paper. It never existed because the Arabs rejected the partition proposal and started a war to prevent it from being realized. When they lost that war, Jerusalem west of the armistice line became Israel’s, and Jerusalem east of the line came under Jordanian occupation and entered an extended period of disputed claims. So the U.S., while recognizing Israel within the armistice lines, chose a policy that held the status of Israel’s capital hostage to a fiction that never had a chance of existing.

When Israel captured the eastern part of Jerusalem in 1967, during the Six-Day War, it moved to unite the Old City to the east with the residential city to the west, and in addition annexed dozens of Arab villages to create a massive municipal area that became what many Israeli politicians call “undivided” or “united” Jerusalem. This was indeed a controversial move, especially as it was followed by massive building of Jewish residential neighborhoods in that annexed area; this move continues to not be recognized by any country to this day. It is also controversial within Israel, where many Israelis continue to support the possibility that a future Palestinian state would have its capital in the eastern part of Jerusalem. 

The idea that cities, particularly capital cities, within sovereign nation-states, ought to be under some kind of international jurisdiction, leads to very thorny developments. Berlin, for instance, from 1945 to 1991, was the source of much stickiness in relations between great blocs of countries, resulting in an airlift and a wall, among other issues that were difficult to navigate.

Then there is the matter of Judaism's holiest sites, particularly the only standing wall of the Great Second Temple, being situated in the eastern part of Jerusalem.

Wilf stresses that Trump's announcement of US policy regarding Jerusalem does not attempt tp dictate geopolitical details as foregone conclusions:

Trump’s declaration finally puts an end to this nonsensical policy. By dismissing the fiction of the “Corpus Separatum” at last, the U.S. can stop denying Israel, alone among the nations, a basic national sovereign right to establish its capital in undisputed territory.

Trump used only the ambiguous term “Jerusalem” in his speech, saying, “We are not taking a position on any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem or the resolution of contested borders. Those questions are up to the parties involved.” It would have been better if Trump had specified that the U.S. is only recognizing Israel’s capital in Jerusalem west of 1967 line—in other words, that the U.S. is simply ending the illogical policy that holds the undisputed status of Jerusalem west of the armistice line hostage to the ongoing dispute over Jerusalem east of that line.

Nevertheless, if the U.S. continues to declare that Jerusalem’s final borders should be negotiated (meaning that it leaves open the possibility of a Palestinian capital in the eastern part of Jerusalem), and if the U.S. refrains from describing Israel’s capital as “united” or “undivided” Jerusalem, and if the U.S. continues to refrain from taking any steps that recognize Israel’s annexation of the territories east of the 1967 line, and assuming that the new embassy will be located in Jerusalem west of that line—then Palestinian, Arab, and Muslim leaders who are not itching for violence should be able to legitimately say that Trump’s declaration effectively changes nothing.

Now, what Trump did differs from the LITD view in one significant way: It would have been fine with us if he had used the word "undivided.

Nevertheless, Wilf says we shall now see what the Palestinians and Arabs generally are really all about. If they really let loose with a destructive expression of rage, it will be clear that they don't even want Israel to exist:

if the U.S. continues to declare that Jerusalem’s final borders should be negotiated (meaning that it leaves open the possibility of a Palestinian capital in the eastern part of Jerusalem), and if the U.S. refrains from describing Israel’s capital as “united” or “undivided” Jerusalem, and if the U.S. continues to refrain from taking any steps that recognize Israel’s annexation of the territories east of the 1967 line, and assuming that the new embassy will be located in Jerusalem west of that line—then Palestinian, Arab, and Muslim leaders who are not itching for violence should be able to legitimately say that Trump’s declaration effectively changes nothing.

In fact, if Palestinian, Arab, and Muslim leaders object to the declaration and threaten violence, they should be called on to specify the cause of their anger. Which Jerusalem do they deny Israel’s right to name as its capital? If it is Jerusalem east of the 1967 line, Trump’s declaration does nothing to change that: The U.S. still does not recognize Israel’s annexation of the territories east of the line. The status of that part of Jerusalem is up for negotiations. If the anger is about residential, non-holy Jerusalem within the pre-1967 line—the capital of the State of Israel since its early beginnings—then it implies a blanket refusal to accept the legitimacy of Israel within any borders. To that, the U.S. should not bow.

Ultimately, attaining peace requires that Palestinians and the Arab world accept that the Jewish people have a legitimate right to self-determination in their homeland. This means acknowledging the deep connection between the Jewish people and Jerusalem. It means accepting that the Jews are not foreigners in the land and that this is the homeland of not one, but two peoples. Based on such an acknowledgement, Israelis and Palestinians can then negotiate an agreement to share Jerusalem so that it becomes the capital of both Israel and Palestine, with religious access for all. 

It boils down to whether Palestinians can recognize that Jews have the right to live in their ancient and eternal homeland. Based on their behavior over the past 70 years, we'd be wise not to bet the rent.