"The United States does not believe Jerusalem should be the united capital of Israel."
Only two countries have embassies in Jerusalem — Costa Rica and El Salvador. Of the 184 nations with which America has diplomatic relations, Israel is the only one whose capital is not recognized by the U.S. government. The U.S. embassy, like most others, is in Tel Aviv, 40 miles from Jerusalem. The United States does maintain a consulate in East Jerusalem, however, that deals with Palestinians in the territories and works independently of the embassy, reporting directly to Washington. Today, then, we have the anomaly that American diplomats refuse to meet with Israelis in their capital because Jerusalem's status is negotiable, but make their contacts with Palestinians in the city.
In 1990, Congress passed a resolution declaring that "Jerusalem is and should remain the capital of the State of Israel" and "must remain an undivided city in which the rights of every ethnic and religious group are protected." During the 1992 Presidential campaign, Bill Clinton said: "I recognize Jerusalem as an undivided city, the eternal capital of Israel, and I believe in the principle of moving our embassy to Jerusalem." He never reiterated this view as President; consequently, official U.S. policy remained that the status of Jerusalem is a matter for negotiations.
In an effort to change this policy, Congress overwhelmingly passed The Jerusalem Embassy Act of 1995. This landmark bill declared that, as a statement of official U.S. policy, Jerusalem should be recognized as the undivided, eternal capital of Israel and required that the U.S. embassy in Israel be established in Jerusalem no later than May 1999. The law also included a waiver that allowed the President to essentially ignore the legislation if he deemed doing so to be in the best interest of the United States. President Clinton exercised that option.
During the 2000 presidential campaign George W. Bush promised that as President he would immediately "begin the process of moving the United States ambassador to the city Israel has chosen as its capital." In June 2001, however, Bush followed Clinton's precedent and used the presidential waiver to prevent the embassy from being moved.
While critics of Congressional efforts to force the administration to recognize Jerusalem as Israel's capital share the President's view that such a move would harm the peace process, supporters of the legislation argue the opposite is true. By making clear the United States position that Jerusalem should remain unified under Israeli sovereignty, they say, unrealistic Palestinian expectations regarding the city can be moderated and thereby enhance the prospects for a final agreement.