President Donald Trump has signed the waiver keeping the US embassy to Israel in Tel Aviv, thus avoiding the initiative of moving it to a controversial location Jerusalem.
Trump failed to keep the promise he made during 2016 election campaign.
The move, which the White House said, was made in an effort to spur peace talks between Israeli and Palestinian officials.
President Trump made this decision to maximize the chances of successfully negotiating a deal between Israel and the Palestinians, fulfilling his solemn obligation to defend America's national security interests," the White House statement said. "But, as he has repeatedly stated his intention to move the embassy, the question is not if that move happens, but only when,"CNN reported.
However, Prime Minister Benjamin Netanyahu said in a statement that Israel has been "disappointed" with Trump's decision to postpone the moving of the US embassy in Tel Aviv to Jerusalem.
The statement further accused Trump's decision of breaking his campaign promise and driving peace away.
"Israel's consistent position is that the American embassy, like the embassies of all countries with whom we have diplomatic relations, should be in Jerusalem, our eternal capital," the Prime Minister said.
Ambassador Dr. Husam Zomlot, the Palestinian representative to the United States, said the Trump policy "gives peace a chance."
The President also promised Israeli ambassador Dr Husam Zomlot, the Palestinian representative to the United States, said the Trump policy "gives peace a chance."
"We are ready to to start the consultation process with the US administration," Zomlot said. "We are serious and genuine about achieving a just and lasting peace.
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