The Palestinian Authority (PA) delegation to Australia called the potential move "deeply disturbing", warning that it should "exercise caution" and "seriously consider the consequences of any such move".
Australia may follow the United States' lead and relocate its embassy in Israel from Tel Aviv to Jerusalem, bucking decades of tradition. Yerushalayim (the city's name in Hebrew) is the capital of the Jewish state, and was also the Jewish capital in biblical times, where the temple, the holiest place for Jews, once stood.
"We are committed to a two-state solution, but frankly, it hasn't been going that well", Morrison said.
The government is also reviewing its support for the Obama-era Iran nuclear agreement - which would also be a popular move with Israel.
"I have made this decision without any reference to the United States", he said.
The two-state solution envisages an independent Palestine alongside Israel. The result has been to permanently mire the United Nations in the conflict, at the expense of its credibility, while also limiting its ability to support genuinely oppressed peoples throughout the world. We would like to see them here.
Until a compromise is reached, most countries operate their official embassies to Israel from Tel Aviv, claiming that the status of the city should be determined through negotiations between Israel and the Palestinians.
Whether Australia will end up recognizing Jerusalem - or West Jerusalem - is still open.
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The Times noted that nothing in the documents indicate that Kushner or his company broke the law. White House senior advisers Ivanka Trump and Jared Kushner attend a meeting with U.S.
Indonesian Foreign Minister Retno Marsudi, speaking at a joint news conference with Palestinian Foreign Minister Riyad al-Maliki in Jakarta, reaffirmed his country's support for a two-state solution to the Middle East dispute and warned Australia against the risk of insecurity. "Not only the USA but a number of other countries, including Russian Federation, the Czech Republic, Vanuatu and Guatemala, now acknowledge this incontrovertible reality".
"Any decision like that might damage the peace process. this will have very negative implications on the relations between Australia and not only Arab countries but many other (Islamic countries) as well". "While Australia's voting record has generally acknowledged this, our bipartisan policy goals would be better served by voting "no" on some of the resolutions on which Australia now abstains".
The former government headed by PM Malcolm Turnbull rejected relocating the country's embassy to Jerusalem.
"I've been pleased to be able to explain very clearly the nature of the announcements that I've made today and I've been very pleased with the response that I've received from President Joko Widodo", Morrison said.
Israel is the only nation on earth denied the right, in a practical sense, to choose its own capital. Late past year, the US President Donald Trump ordered the US embassy to be moved to Jerusalem and the relocation was completed by April 2018.
In a statement, a spokesman said Senator Payne and her counterpart had a "constructive discussion" about the announcement and Australia was aware of Indonesia's perspective on the Arab-Israeli conflict.
Morrison is scheduled to make an announcement regarding Australia's backing of the Iran nuclear deal and a vote about Palestinian leadership Tuesday, the Herald reported.