President Donald Trump will announce on Wednesday that the United States recognises Jerusalem as the capital of Israel and will move its embassy there, breaking with longtime US policy and potentially threatening regional stability.

Despite warnings from Western and Arab allies, Trump in a 1pm White House speech will direct the State Department to begin looking for a site for an embassy in Jerusalem as part of what is expected to be a years-long process of relocating diplomatic operations from Tel Aviv.

Jerusalem's status has been a stumbling block in decades of on-off Israeli-Palestinian peace efforts. Israel considers the city its eternal and indivisible capital and wants all embassies based there. Palestinians want the capital of an independent Palestinian state in the east of the city.

One Palestinian envoy said the decision was a declaration of war in the Middle East. Pope Francis called for Jerusalem's "status quo" to be respected, saying new tension would further inflame world conflicts, while China and Russia expressed concern the plans could aggravate regional hostilities.

Washington's Middle East allies have all warned against the dangerous repercussions of Trump's decision.

Turkey said it could go as far as breaking off diplomatic ties with Israel if the US move goes ahead. A government spokesperson said it would plunge the region into "a fire with no end in sight".

Trump will sign a national security waiver delaying a physical move since the United States does not have an embassy structure in Jerusalem to move into. A senior administration official said it could take three to four years to build one.

But Trump's decision, a core promise of his election campaign last year, will upend decades of American policy that has seen the status of Jerusalem as part of a two-state solution for Israelis and Palestinians.

- Reuters