Citing a 1995 law, the Jerusalem Embassy Act, compelling the president make the move absent national security risks, Trump said the time had come to recognize what everyone already knows to be true. "Jerusalem is the capital the Jewish people established in ancient times," he said. "Today Jerusalem is the seat of Israel's government."
"This is nothing more or less than a recognition of the reality," he added.
He directed the State Department to begin preparing the move, which may take years as the government scopes out a location, hires architects and plans for what is sure to be a challenging security environment.
Trump made the announcement despite fierce opposition from America's closest allies in recent days. European and Arab world leaders alike, including Britain, France, Germany, Saudi Arabia, Jordan, Egypt and the pope, said that he was recklessly challenging a delicate status quo over the city, in which the international community has insisted its future must be determined in direct negotiations between Israelis and Palestinians themselves.
Trump said that his move does not change his commitment to that negotiated settlement– and underscored his commitment by endorsing a two-state solution for the first time.
"We want an agreement that is a great deal for the Israelis and a great deal for the Palestinians," he said. "The United States would support a two state solution if agreed to by both sides."
Trump said that his actions on Wednesday do not determine the "specific boundaries of Israeli sovereignty" in the city, stating those would be "subject to final status negotiations between the parties." The Israeli government says that Jerusalem is its undivided and eternal capital, while Palestinians insist that a peace agreement must deliver them a sovereign state with a capital of its own in the city's eastern districts.
"We are not taking a position on any final status issues," Trump said. To that end, Nikki Haley, the US envoy to the UN, said the administration would not be “taking sides” on the fate of East Jerusalem.
But the international community did not immediately interpret Trump's moves in this way. Antonio Guterres, the UN secretary-general, made remarks to the press shortly after Trump spoke urging calm, amid warnings from the State Department itself that violence may erupt following Trump's announcement.
"Jerusalem is a final status issue that must be resolved in final status negotiations between the two parties," Guterres stated. "In this moment of great tension, I want to make it clear there is no alternative to the two-state solution. There is no Plan B."
France's president, Emmanuel Macron, also called the decision "regrettable" and said the status of Jerusalem was not for one country to decide, but a matter of international security, of consensus and of law. And Britain's prime minister, Theresa May, characterized the move as "unhelpful" to the prospects for peace in the region.
Prime Minister Benjamin Netanyahu praises 'historic' Trump decision on Jerusalem
"We disagree with the US decision to move its embassy to Jerusalem and recognize Jerusalem as the Israeli capital before a final status agreement," May said. "The British Embassy to Israel is based in Tel Aviv and we have no plans to move it."
"We encourage the US administration to now bring forward detailed proposals for an Israel-Palestinian settlement," she added. "To have the best chances of success, the peace process must be conducted in an atmosphere free from violence. We call on all parties to work together to maintain calm."
The administration's closest allies in the Arab world, on which it based its upcoming Mideast peace initiative, strongly condemned the move. Egypt said it refused to recognize it and warned of grave consequences. Turkey threatened to sever ties to Israel and the State Department's office for embassy security warned of planned protests in all of its major cities.
Despite unanimous international protest, US Secretary of State Rex Tillerson said the administration had consulted partners ahead of the decision and that his team "firmly believes there is an opportunity for a lasting peace."
A senior White House official told The Jerusalem Post that Trump's Middle East peace team, led by his son-in-law, Jared Kushner and special representative for international negotiations Jason Greenblatt, was a consultative partner on the decision and fully supports the move.
"The peace team was fully aware of this and in the loop," the official said. "Certain parties are going to react the way they need to react. We expect bumps along the way– but we believe there is an historic opportunity."
Greenblatt wrote on Twitter that Trump's speech was a "courageous" effort to recognize the current and historic reality of the city's status. His team is committed to pressing on, he continued, no matter how angrily parties react in the short term.
Trump castigated past presidents as cowardly for failing to make the move earlier, "under the belief that delaying recognition of Jerusalem would advance the cause of peace."
"The record is in," he added. "After two decades of waivers, we are no closer to a lasting peace agreement between Israel and the Palestinians."
"Old challenges demand new approaches. My announcement today marks the beginning of a new approach," Trump said in his announcement from the White House diplomatic reception room, flanked by Vice President Mike Pence, who has pushed for the move. Pence will be visiting Israel later this month.
Members of Israel's cabinet have praised the move as "destined" and "overdue." And Prime Minister Benjamin Netanyahu released a video statement praising Trump's action.
"We're profoundly grateful to the president for the courageous and just decision," Netanyahu said, calling the move one in furtherance of peace, "because there is no peace that does not include Jerusalem as the capital of Israel."
"This decision reflects the president's commitment to an ancient and enduring truth," he added.
But the Palestinians have warned this marks a potentially fatal blow to Trump's burgeoning peace initiative, and Hamas has called for a new intifada– a violent uprising– in response.
In a forceful speech, Palestinian Authority President Mahmoud Abbas rejected Trump's claim that his move was actually a step towards peace– and said that, with his actions, the US had relinquished its historic role as broker.
"The US administration with this statement has chosen to go against all the international and bilateral agreements, and to ignore the international consensus," Abbas said in a televised address. "The United States is withdrawing from the role it has played in the peace process."
Abbas recounted Christian and Muslim history in the contested city, known in the Arab world as al-Quds, without acknowledging any Jewish history there.
"It's an attempt to change our history, and it will not succeed," he said. "It's a Palestinian city– an Arab city, a Christian city and a Muslim city."
A day of rage is expected in the ancient city, and regionwide, on Friday.