Israeli Prime Minister Benjamin Netanyahu's office said in a statement that Israel was "disappointed" by Trump's decision, arguing that the presence of embassies outside the city "drives peace further away by helping keep alive the Palestinian fantasy that the Jewish people and the Jewish state have no connection to Jerusalem".
In a memorandum to Secretary of State Rex Tillerson, Trump said that "it is necessary, in order to protect the national security interests" of the United States. That means that if Trump does not sign the waiver on Thursday, the US government will be forced, by law, to begin the process of relocating the embassy from Tel Aviv to Jerusalem.
A senior administration official said Wednesday that Trump still supports the move but believes with the possibility of peace between Israel and the Palestinians at hand, now may not be the best time to anger the Palestinians by moving the embassy to contested land. Israel considers the holy city to be its capital and insists the city must not be divided; Palestinians claim east Jerusalem as the capital for a future, independent state.
Another administration official said the decision to sign the waiver was not yet final and that paperwork both to move the embassy to Jerusalem and to keep it in Tel Aviv had been presented to the president.
Palestinians claim the city's east and have warned against a U.S. move.
United Nations vows to tighten sanctions on North Korea
In a similar incident on January 16, past year South Korea fired at a suspected North Korea drone at the demilitarized zone.
Still, a USA official said Trump remained committed to his campaign pledge and would eventually fulfill it, though no timetable had been set.
When Israel was established a year later, the US and other countries based their embassies in the Tel Aviv area instead of Jerusalem, out of respect for the United Nations plan.
Trump had faced a Thursday deadline to determine how to proceed. "We are serious and genuine about achieving a just and lasting peace".
The Jerusalem Embassy Act passed by Congress in 1995 mandating relocation of embassy to Jerusalem allows the president to waive the requirement in accordance with USA national security interests. Under pressure from Arab leaders and others, Trump followed the lead of past presidents of both parties who have waived the law in six-month stretches.
The status of Jerusalem is one of the major stumbling blocks. This is the waiver the president signed Thursday.
When told that Trump said he will move the embassy later, Steinitz says: "I hope that happens before the Messiah comes". Trump has said he's reviewing whether to fulfill his campaign promise to move it to Jerusalem. He was in the process of negotiating peace with the Palestinians, who also had political claims to Jerusalem.