Occupied Jerusalem: US President Donald Trump faced a Monday deadline to decide whether to move the US embassy to Israeli-occupied Jerusalem.

There were suggestions he would sign the waiver and decline to move the embassy for now, but later this week declare Occupied Jerusalem as Israel’s capital.

Here are five questions and answers explaining the issue:

What is the dispute?

Israel seized control of Occupied Jerusalem during the 1967 war and later annexed and occupied it. The move was never recognised by the international community but Israelis want it to be their capital.

The Palestinians see Occupied Jerusalem as the capital of their future state.

No countries have accepted Israeli sovereignty and have their embassies in the commercial capital Tel Aviv instead.

Moving the embassy would be seen as the United States endorsing Israel’s claim to the city and rejecting the Palestinian one.

What is the waiver?

In 1995, the US Congress passed the Jerusalem Embassy Act calling on the country to move its embassy to the Holy City.

“Since 1950, the city of Jerusalem has been the capital of the state of Israel,” it said, demanding the government move the embassy.

The act is binding but there was a clause that presidents could delay it for six months at a time to protect “national security interests”.

Presidents Bill Clinton, George W Bush and Barack Obama signed these waivers routinely every six months.

Trump reluctantly signed the first waiver that came due during his presidency on June 1. He now faces a second deadline.

Will Trump sign?

During the election campaign, Trump promised multiple times to move the embassy, and his ambassador to Israel, David Friedman, is a strong advocate of the shift.

However, Trump appeared to back away from the idea during his first months in office under pressure from the Palestinians and other Arab leaders.

As he seeks ways to inject new life into moribund peace talks, there have been warnings that such a move would infuriate the Arab world.

There have been suggestions he will not move the embassy now, but instead recognise Occupied Jerusalem as Israel’s capital later this week.

Dan Shapiro, US ambassador to Israel under Obama, said such a move in practice would not “have a significant effect, but it will be a signal of future intent to follow through on the president’s commitment to actually move the embassy”.

“It would be new language for the United States to formally describe Jerusalem as Israel’s capital. That has not been the traditional US language.”

What happens if he doesn’t?

If Trump chooses not to sign the waiver, the embassy wouldn’t move immediately, but there are rapid repercussions.

Under the 1995 act, the US State Department would see a 50-per cent cut in all its future budgets for “acquisition and maintenance of buildings abroad” until the new embassy opens.

In 2016, $968 million (Dh3.5 billion) was spent on embassy security, construction and maintenance, according to State Department figures.

What would be the impact of the move?

Saeb Erekat, secretary general of the Palestine Liberation Organisation, said on Sunday that such recognition would “promote international anarchy and disrespect for global institutions and law”.

The United States would “be disqualifying itself to play any role in any initiative towards achieving a just and lasting peace”, he said.

The Palestinian Islamist movement Hamas, which controls the Gaza Strip, called on Saturday for a new “intifada” if Washington recognises Occupied Jerusalem as the capital of Israel or moves its embassy to the disputed city.