History of the State of Palestine in the context of "Palestinian Arabs"

The status of Jerusalem has been described as "one of the most intractable issues in the Israeli–Palestinian conflict" due to the long-running territorial dispute between Israel and Palestine, both of which claim it as their capital city. Part of this issue of sovereignty is tied to concerns over access to the holy sites of Jerusalem in the Abrahamic religions; the current religious environment in Jerusalem is upheld by the "Status Quo" of the former Ottoman Empire. As the Israeli–Palestinian peace process has primarily navigated the option of a two-state solution, one of the largest points of contention has been East Jerusalem, which was part of the Jordanian-annexed West Bank until the beginning of the Israeli occupation in 1967.

The United Nations recognizes East Jerusalem (and the West Bank as a whole) as the territory for an independent Palestinian state, thus rejecting Israel's claim to that half of the city. There is broader consensus among the international community with regard to West Jerusalem being Israel's capital city, as it falls within Israel's sovereign territory (per the Green Line) and has been recognized as under Israeli control since the 1949 Armistice Agreements.

Palestinians (Arabic: الفلسطينيون, romanized: al-Filasṭīniyyūn) are an Arab ethnonational group native to the Levantine region of Palestine. They represent a highly homogeneous community who share a cultural and ethnic identity, speak Palestinian Arabic and share close religious, linguistic, and cultural ties with other Levantine Arabs.

In 1919, Palestinian Muslims and Christians constituted 90 percent of the population of Palestine, just before the third wave of Jewish immigration and the setting up of British Mandatory Palestine after World War I. Opposition to Jewish immigration spurred the consolidation of a unified national identity, though Palestinian society was still fragmented by regional, class, religious, and family differences. The history of the Palestinian national identity is a disputed issue amongst scholars. For some, the term "Palestinian" is used to refer to the nationalist concept of a Palestinian people by Palestinian Arabs from the late 19th century and in the pre-World War I period, while others assert the Palestinian identity encompasses the heritage of all eras from biblical times up to the Ottoman period. After the Israeli Declaration of Independence, the 1948 Palestinian expulsion, and more so after the 1967 Palestinian exodus, the term "Palestinian" evolved into a sense of a shared future in the form of aspirations for a Palestinian state. Though the concept of Palestinian citizenship for the purpose of international law has been revived, the in fieri realization of self-determination is still insufficient, thus Palestinians remain over the threshold of eligibility to receive international protection as refugees and stateless persons.

On December 6, 2017, the United States of America officially recognized Jerusalem as the capital city of the State of Israel. American president Donald Trump, who signed the presidential proclamation, also ordered the relocation of the American diplomatic mission to Jerusalem from Tel Aviv, constituting what is now the Embassy of the United States in Jerusalem, which was established on the grounds of the former Consulate General of the United States in Jerusalem. Israeli prime minister Benjamin Netanyahu welcomed the decision and praised the announcement by the Trump administration. On December 8, U.S. Secretary of State Rex Tillerson clarified that Trump's statement "did not indicate any final status for Jerusalem" and "was very clear that the final status, including the borders, would be left to the two parties to negotiate and decide" in reference to the recognition's impact on the Israeli–Palestinian peace process.

Trump's decision was rejected by the vast majority of world leaders; the United Nations Security Council held an emergency meeting on December 7, where 14 out of 15 members condemned it, but the motion was overturned by U.S. veto power. The United Kingdom, France, Japan, Italy, and Sweden were among the countries who criticized Trump's decision at the meeting. Other countries supported the move; Guatemala affirmed their intent to issue a follow-up on the U.S. recognition and relocate their diplomatic mission to Jerusalem from Tel Aviv, and the Czech Republic, Honduras, Paraguay, and Romania stated that they were also considering the same course of action. Italian politician Federica Mogherini, as the foreign policy chief of the European Union (EU), stated that all EU member countries were united on the issue of Jerusalem—she reaffirmed the EU's firm stance on East Jerusalem being the capital of an independent Palestinian state. By late 2022, only Guatemala, Honduras, and Kosovo had established diplomatic missions to Israel in Jerusalem; Paraguay reversed their 2018 decision within months, and the Honduran foreign ministry has since stated that they are considering a reversal of their decision as well.

In Jerusalem, the "City Line" was a 7-kilometre (4.3 mi) segment of the Green Line that divided the city between Israel and Jordan as part of the 1949 Armistice Agreements, which ended the 1948 Arab–Israeli War. On one side was West Jerusalem, which was part of Israel, and on the other side was East Jerusalem, which was part of the Jordanian-annexed West Bank; East Jerusalem also included the Old City and the Israeli exclave of Mount Scopus. Additionally, a "Demilitarized Area" surrounding the British Government House was controlled by the United Nations. The City Line had numerous fortifications and obstacles on both sides, and various buildings in the city that were situated along the boundary were used as military posts. This arrangement was in place until the 1967 Arab–Israeli War, when Israel captured the entirety of Jerusalem. In 1988, six years before the Israel–Jordan peace treaty, the Jordanian government formally renounced the country's territorial claim to Jerusalem in favour of supporting the establishment of a Palestinian state, though the Jordanian Waqf continues to exercise authority over the Al-Aqsa Mosque compound in the Old City. Pursuant to the two-state solution laid out by the Oslo Accords, East Jerusalem has been sought by the Palestine Liberation Organization as the capital city of the State of Palestine.