Australia will recognize Jerusalem as Israel's capital and move its embassy from Tel Aviv, says Prime Minister Scott Morrison.
Should this happen, the move would follow a recent US policy shift that has caused international criticism.
Mr. Morrison said that Australia continued to commit to a two-state solution to the Israeli-Palestinian conflict.
Political opponents said that Mr. Morrison's statements were a "sneaky" ruse for votes before a decisive by-election.
The status of Jerusalem is one of the most controversial issues between Israel and the Palestinians.
US President Donald Trump made international criticisms last year when he reversed decades of US foreign policy, recognizing the ancient city as the capital of Israel. The US Embassy was moved from Tel Aviv to Jerusalem in May.
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Mr. Morrison said he would consult with his Cabinet and other nations before making any decisions.
"We are I have committed myself to a two-state solution, but frankly it has not gone so well ̵
He said that it could be possible for his nation to support a two-state solution and recognition of Jerusalem as Israel's capital – something that had previously "adopted" Australia was impracticable.
The prime minister said a future scenario could involve Australia being a capital of the Palestinian Authority in East Jerusalem and the Israeli capital in West Jerusalem.
"Australia should be open-minded," said Morrison.
Israeli Prime Minister Be Njamin Netanyahu tweeted his approval on Monday.
Mr. Morrison's predecessor Malcolm Turnbull had ruled out the US relocating the Australian embassy to Jerusalem.
Post Election Question
On Tuesday, Mr. Morrison said his thinking was led by Australia's former ambassador to Israel, Dave Sharma.
Mr. Sharma, the candidate of the government in a by-election to take place on Saturday, for the place that Mr. Turnbull evacuated after his dismissal as Prime Minister.
If Mr. Morrison does not retain the electorate of Sydney, he will be forced to be a minority government. He denies that his comments on Tuesday are directed to Wentworth's large Jewish community.
Penny Wong, Labor Labor's Senate chairman, said Mr. Morrison was playing "dangerous and fraudulent puns on Australian foreign policy."
"[Scott Morrison] is ready to say anything if he believes that he will win him more votes – even at the cost of Australia's national interest," she said.