SYDNEY, Australia (AFP) — Australia said it would no longer recognize West Jerusalem as Israel's capital Tuesday, a policy reversal that prompted a curt rebuke from the Jewish state.

Foreign Minister Penny Wong said the city's status should be decided through Israeli-Palestinian peace talks, unwinding a contentious declaration by the previous conservative government.

"We will not support an approach that undermines" a two-state solution, Wong said, adding: "Australia's embassy has always been, and remains, in Tel Aviv."

Israeli Prime Minister Yair Lapid criticized Tuesday's move — which comes before the 1 November elections.

"We can only hope that the Australian government manages other matters more seriously and professionally," he said.

The Palestinians on Tuesday hailed Australia's decision.

"We welcome Australia's decision with regards to Jerusalem and its call for a two-state solution in accordance with international legitimacy," the Palestinian Authority's civil affairs minister, Hussein al-Sheikh, said on Twitter.

Sheikh hailed Australia's "affirmation that the future of sovereignty over Jerusalem depends on the permanent solution based on international legitimacy."

Steadfast friend

Israel annexed east Jerusalem following the 1967 Six Day War, and declared the entire city its "eternal and indivisible capital."

Palestinians claim the eastern part as the capital of a future state.

In 2018, Australia's then-Prime Minister Scott Morrison followed United States president Donald Trump's lead and unilaterally recognized West Jerusalem as the Israeli capital.

The move caused a domestic backlash in Australia and friction with neighboring Indonesia — the world's most populous Muslim-majority nation — temporarily derailing a bilateral free trade deal.

"I know this has caused conflict and distress in part of the Australian community, and today the government seeks to resolve that," Wong said.

Wong insisted that the decision did not signal any broader shift in policy or a new-found hostility towards Israel.

"Australia will always be a steadfast friend of Israel. We were amongst the first countries to formally recognize Israel," she said.

"We will not waver in our support of Israel and the Jewish community in Australia. We are equally unwavering in our support of the Palestinian people, including humanitarian support."

The center-left Labor party, with Anthony Albanese as prime minister and Wong as foreign minister, came to power in May 2022 after strongly opposing the previous government's Jerusalem policy.

Wong accused the Morrison government of making the Jerusalem decision to influence a by-election in a Sydney suburb with a sizable Jewish community.