Vice President Pence watches as President Trump sign his proclamation about his decision to recognize Jerusalem as the capital of Israel, and his plan to relocate the U.S. Embassy to that city, in the Diplomatic Room of the White House in Washington, on Dec. 6, 2017.
Jim Lo Scalzo, EPA

President Trump's recognition of Jerusalem as Israel’s capital sends a stark message that Palestinians should abandon their all-or-nothing demands in peace talks and applies subtle pressure on the Jewish state to make concessions, analysts said Wednesday.  

Trump's message to Palestinians in his speech can be summed up as the less you concede, the more you lose, said Eugene Kontorovich, head of international law at the Kohelet Policy Forum in Jerusalem who testified before Congress in November. 

“The Palestinians have learned that by saying ‘no’ they can always get something better next time,” Kontorovich said. “They have to learn that if they say no, next time they won’t get the same offer.”

The announcement fulfills the president’s campaign pledge to improve U.S. relations with Israel and move the embassy from Tel Aviv to Jerusalem, said Jonathan Schanzer, senior vice president at the Foundation for Defense of Democracies.

“A strong Israel secure in its alliance with the United States will be more willing to take chances for peace,” Schanzer said. “It will be interesting to watch in the weeks and months ahead whether the Trump administration makes requests of the Israelis on other issues.”

Israel regards Jerusalem as its capital, but the international community says the city's status should be determined through peace talks. Palestinians seek East Jerusalem as the capital of a future, independent state. Israel captured East Jerusalem in 1967 and later annexed it. 

Palestinians strongly rejected the president's move, saying it shows the U.S. sides with Israel and can no longer play the role of peace broker. 

"It’s over," said Mustafa Barghouti, a member of the Palestine Liberation Organization's Central Council. Trump's announcement "aborted his peace process before it was born."

Palestinians will fight back by seeking support from the United Nations, the International Criminal Court and other world bodies to isolate and weaken Israel, Barghouti said.

If Trump wanted to be fair to both sides, he would have said the Palestinians should have their capital in East Jerusalem as well, he said.

Saudis are also condemning Trump's decision, the Kingdom of Saudi Arabia's Royal Court said in a statement Wednesday.

"The Government of the Kingdom of Saudi Arabia had previously warned of the serious consequences of such an irresponsible and unwarranted step," the statement said. "The Kingdom expresses its denunciation and deep regret that the administration has taken this step, as it represents a great bias against the historic and permanent rights of the Palestinian people in Jerusalem . . . The Government of the Kingdom of Saudi Arabia hopes that the U.S administration will reverse this action."

Trump’s announcement, which accompanied instructions to prepare for a lengthy move of the U.S. Embassy from Tel Aviv to the contested city, gives Israel something it's long wanted.

Trump said his decision reflected reality that Jerusalem is the seat of Israel’s government, its supreme court, parliament and home to its prime minister and ceremonial president. But he clarified the United States is not taking a stand on key issues to be resolved in peace negotiations. 

Women chant slogans and hold Palestinian flags during a protest at the Unknown Soldier Square, in Gaza City, Wednesday, Dec. 6, 2017.
Adel Hana, AP

“We are not taking a position of any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem or the resolution of contested borders," Trump said. He also said the U.S. would support establishing a separate Palestinian state "if agreed to by both sides."

Trump named his son-in-law and adviser Jared Kushner to work on peace between the Israelis and Palestinians, with a mandate to find new solutions to a problem that has confounded U.S. presidents for decades. Few details have been publicly released about their progress.   

Despite numerous wars, terrorism attacks and violent uprisings, successive peace negotiations have failed, often followed by more violence.

In addition, Israel built more settlements in East Jerusalem and the West Bank, and erected a security barrier that cuts across land Palestinians want for a future nation. 

Barghouti scoffed at the notion that Israeli leaders will see Trump's action on Jerusalem as a signal to make concessions.

More: Trump declares Jerusalem as Israel’s capital, breaking with decades of U.S. foreign policy

More: Jerusalem has history of many conquests, surrenders

More: Palestinian leader: Trump's Jerusalem decision a 'withdrawal' of peace process

"No, it just made them more arrogant," he said. "Now they feel they have a full green light from the president of the United States to do what they want."

But the Palestinians will launch pressure of their own, without turning to violence, he said. "We will accomplish the recognition of Palestine as an occupied state and struggle as long as it takes to get freedom from the Israeli occupation. Times will change."

Israeli Prime Minister Benjamin Netanyahu delivers a speech on Dec. 6, 2017, during a diplomatic conference focused on Israel's security and economic ties with countries globally, in Jerusalem.
Menahem Kahana, AFP/Getty Images

Kontorovich said the White House will not be locked into past negotiations that failed to produce peace. 

The new approach is to send the message that “the Palestinians should not assume that Israel’s last offer will always be the floor or minimum for the next round of negotiations,” Kontorovich said. “The narrative for the Palestinians is time is not on your side.”