Palestinians outraged, Israel joyous at Trump's Jerusalem move

US President Donald Trump's decision Wednesday declaring Jerusalem as Israel's capital outraged Palestinian leaders who said it disqualified the United States as a peace broker, but was hailed by Israel as historic.

The city, however, remained calm on a cold and rainy evening after Trump's speech with no sign of protests, while Israeli authorities projected an American flag onto the walls in one area of Jerusalem's ancient Old City in celebration.

Palestinian demonstrations were set for the occupied West Bank on Thursday, and several thousand marched in the Hamas-run Gaza Strip on Wednesday night, burning US and Israeli flags while chanting "Death to America" and "Death to Israel."

Palestinian leaders in the West Bank were left fuming after Trump's speech and responded with outrage, declaring that the United States could no longer serve as Middle East peace broker.

President Mahmud Abbas called it "deplorable".

"These deplorable and unacceptable measures deliberately undermine all peace efforts," Abbas said in a speech after Trump's announcement.

He said it amounted to "an announcement of US withdrawal from playing the role it has been playing in the past decade in sponsoring the peace process."

Saeb Erekat, the secretary-general of the Palestine Liberation Organisation who long served as the Palestinians' top negotiator, said Trump had "destroyed the two-state solution".

"As a chief Palestinian negotiator, how can I sit with these people if they dictate on me the future of Jerusalem as Israel's capital?" he said.

"I think tonight he is strengthening the forces of extremists in this region as no one has done before," Erekat said, referring to Trump.

Trump's move upturns decades of precedent and runs counter to international consensus, with no other country currently taking the same stance.

Jerusalem?s status is among the most difficult issues in the Israeli-Palestinian conflict, and the US traditional position has been that it must be negotiated between the two sides.

While Israel has long considered Jerusalem its capital, with the prime minister's office and parliament building located there, countries have avoided recognising it as such to prevent damaging hopes for a two-state solution.

The Palestinians see the eastern sector of the city as the capital of their future state.

- 'Focus of our hopes' -

A decision like Trump's has been long sought by Israeli leaders, and Prime Minister Benjamin Netanyahu hailed it as "historic" and "courageous and just".

"This is a historic day," Netanyahu said in a video message released immediately after Trump's speech.

"Jerusalem has been the capital of the Jewish people for 3,000 years. It's been the capital of Israel for nearly 70 years," he added, referring to Jewish history in the region and the founding of the modern state of Israel in 1948.

"Jerusalem has been the focus of our hopes, our dreams, our prayers for three millennia."

"We're profoundly grateful for the president for his courageous and just decision to recognise Jerusalem as the capital of Israel and to prepare for the opening of the US embassy here."

Netanyahu also called on "all countries that seek peace to join the United States in recognising Jerusalem as Israel's capital and to move their embassies here".

Netanyahu pledged no change to the status quo at Jerusalem's highly sensitive holy sites in the city sacred to Jews, Christians and Muslims -- frequently the source of tension.

But while Netanyahu may have hoped to calm tensions with the pledge, the fallout from such a controversial decision concerning a city so intensely disputed remained unpredictable.

While Palestinians have been divided between armed Islamist movement Hamas and Abbas's Fatah in recent years, Jerusalem remains one of the issues that unites them.

Hamas had issued warnings in recent days as news of Trump's intentions spread, and it reacted to his speech on Wednesday with another.

"This decision will open the gates of hell on US interests in the region," Hamas official Ismail Radwan told journalists after Trump's announcement.

He called on Arab and Islamic states to "cut off economic and political ties with the US embassy and expel American ambassadors to cripple" this decision.

Separately, Palestinian officials said they switched off the lights to the giant Christmas tree in the West Bank city of Bethlehem, believed to be the city where Jesus was born, in protest.

But in another illustration of the starkly different viewpoints, Israeli President Reuven Rivlin said of Trump's declaration that "there is no more fitting or beautiful gift as we approach 70 years of the state of Israel?s independence."