Washington, DC – President Donald Trump’s decision to move the US embassy in Israel to Jerusalem is a blunder driven by domestic US politics, but with international strategic consequences, Middle East analysts and former US diplomats say.

The US president, shortly after coming into office nearly a year ago, had raised some hopes of a renewed Middle East peace process by holding a series of meetings with Palestinian leader Mahmoud Abbas in Washington, Bethlehem and New York.

But last week, Trump announced that the US is formally recognising Jerusalem as Israel’s capital and will begin the process of moving the US embassy to the city from Tel Aviv, raising doubts from the Palestinians, as well as Middle East analysts about the US’ role as a broker of a potential peace deal.

“It has injected anxiety, pressure, anger, resentment all over because not only is this a legal or political matter, this is the politics of identity,” Husam S Zomlot, head of the PLO General Delegation to the US, said in a call with reporters in Washington on Monday.

“This has touched on a nerve,” Zomlot added.

Any US peace plan sidelined

Trump’s ability to introduce a comprehensive peace plan, if not foreclosed, is likely sidelined for the foreseeable future, experts and diplomats say.

The key question, analysts say, is how Palestinian leaders will react.

Early indications are that they will press their case with the international community.

Palestinian leader Mahmoud Abbas, speaking at the Organisation of Islamic Cooperation (OIC) summit on Wednesday, said the US had “disqualified” itself from any future peace talks.

“We shall not accept any role for the United States in the peace process, they have proven their full bias in favour of Israel,” Abbas said.

Yousef al-Othaimeen, OIC secretary-general, said the group “rejects and condemns the American decision”.

Aaron David Miller, a former US negotiator and now a Middle East expert at the Wilson Center in Washington, DC, said that “this is about as a grim a situation from the Palestinian perspective as I have seen in a long time in terms of what their options are”.

Even though Trump, in his statement, did not rule out a future resolution of Jerusalem’s status, the problem is that Israel asserts sovereignty over both East and West Jerusalem and continues to create realities on the ground intended to deny the Palestinians a capital, Miller told Al Jazeera.

“All of that combines to create an imbalance of power which I would argue strongly predisposes this issue in favour of the Israelis,” Miller added.

Trump has, in effect, “decided it’s more important to expand, enhance, deepen and strengthen the US relationship with Israel than it is to advance the very peace process that he has raised expectations about,” said Daniel C Kurtzer, a former US ambassador to Egypt and Israel, now a professor of Middle East policy studies at Princeton University.

‘Major earthquake’

The diplomatic reaction worldwide has been largely, though not universally, negative. A meeting of the Arab League in Cairo condemned Trump’s move.

EU foreign ministers meeting with Israeli Prime Minister Netanyahu in Brussels reaffirmed European support for a two-state solution with Jerusalem seen as the eventual capital of both Israel and Palestine.

“If you look at experts, they are all debating the impact of, is this going to be a disaster, or is this going to be tolerable,” Shibley Telhami, a pollster and professor at the University of Maryland, told Al Jazeera. “No one is saying this is really going to advance peace.”

Trump’s advisers on the Middle East are “inexperienced,” “living in a bubble” and “have no independent way of making an assessment about consequences”, Telhami said.

The Trump administration appears to have bought Netanyahu’s argument that the Arabs no longer care about Jerusalem and will only pay lip service to the issue, the anger will die down, and Arab governments will go along because they want to do business with Trump, Telhami add.

“If in fact another Intifada is unleashed, then all bets are off because then you have another round of violence that disrupts priorities and forces Arab rulers to take positions and maybe distance themselves from Trump. If it doesn’t happen, or it happens on a smaller scale, the thing to watch for would be whether or not Abbas would find a way to get back to the negotiating table.”

Hady Amr, former special envoy of Trump’s predecessor Barack Obama to the Israel-Palestinian negotiations, said that Trump’s decision is “a major earthquake in the Palestinian public”.

“People are mad as hell, deeply insulted,” Amr, who is now a senior fellow for Middle East policy at Brookings, told Al Jazeera.

Trump’s move has triggered widespread protests across the occupied West Bank, East Jerusalem and the Gaza Strip.

At least two Palestinians have been killed and hundreds more injured by Israeli forces during the protests.

Demonstrations took place in major cities throughout Asia, the Middle East and North Africa as well.

Security forces fired tear gas at protesters outside the US embassy in Beirut, and hundreds of Jordanians demonstrated in front of the US embassy in Amman.

Hamas and Hezbollah, with Iranian support, are calling for resistance and confrontation.

‘Strategic moment’

Trump has provided “a convenient excuse” for the PLO to declare the US is not an honest broker, renege on its commitments and to take their fight to the UN and the International Criminal Court, Amr said.

Asked by Al Jazeera, what the PLO leadership may do, Zomlot said Palestinians would reevaluate the US role as a mediator and seek forums at the UN and elsewhere.

“This is a strategic moment,” he said.

Abbas will meet European Union foreign affairs ministers in Brussels in January.

EU Foreign Affairs Representative Federica Mogherini said in a press statement after meeting with Netanyahu that the EU would seek to restart the Middle East peace talks through a convening of the “quartet” including the UN, Russia and the US, perhaps expanded to include Egypt and Jordan.