Trump proposes two-state solution to bring 'permanent' peace between Israel and Palestine

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US President Donald Trump on Tuesday said Jerusalem "will remain Israel's undivided capital" as he unveiled his Middle East peace plan aimed at solving the Israeli-Palestinian conflict, describing it as historic and a "giant step" towards peace.

Standing along with the Israeli Prime Minister Benjamin Netanyahu in the White House, Trump proposed a two-state solution and said no Israelis or Palestinians would be uprooted from their homes.

He said that under his vision, Jerusalem "will remain Israel's undivided, very important capital." He proposed Palestinian capital in Eastern Jerusalem and that US will set up its embassy there.

"My vision presents a realistic two-state solution," he said.

Together we can bring a new dawn in the Middle East, Trump said as he urged the Palestinians to accept his deal and bring peace in the region.

Calling it a "historic opportunity" for the Palestinians to achieve an independent state, Trump said he has written to Palestinian President Mahmud Abbas in this regard.

No Palestinian official was present at the launch. The ambassadors from three Arab nations -- Oman, the United Arab Emirates and Bahrain -- were at the White House.

Palestinians have already rejected the leaked proposals. Thousands of Palestinians protested in the Gaza Strip earlier on Tuesday.

The plan, Trump said, calls for a four-year freeze in Israeli settlement activity, doubling of Palestinian territory.

Asserting that his peace plan will more than double the size of Palestinian territory, Trump said that Palestinian people deserve a far better life" than being trapped in a cycle of terrorism and violence."