If France were to move its embassy to New Orleans (or more realistically, if israel were to move its embassy to Brooklyn), the United States would be insulted. The only option would be to break diplomatic relations. That means client states, such as Israel, which need the superpower’s help more than the reverse, are stuck when the patron chooses to insult them. Given the Tel Aviv is the economic, cultural and political center of Israel, having an embassy in Jerusalem is not all that important. Nothing prevent the current ambassador from living in Jerusalem, and one can argue that Jerusalem and Tel Aviv are no further apart than, say Far Rockaway or the southern tip of Staten Island from mid-town Manhattan. The bottom line though, is that by not recognizing Israeli ownership of territory gained in the 1947-49. the US is officially agreeing with those question the legality of the medinah’s existence under international law.
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