Donald Trump announced this week that the United States would be formally recognising Jerusalem as the capital of Israel, upending decades of US policy. In a brief White House address, the American president declared that formal recognition was “a recognition of reality” and the “right thing to do”.

He was immediately praised by Israeli prime minister Benjamin Netanyahu, and condemned by Palestinian Authority president Mahmoud Abbas. The international community, including many American allies, offered swift and unequivocal condemnation.

At first glance, the scale of the international opprobrium may seem disproportionate. West Jerusalem is the seat of Israel’s parliament, supreme court, and most government ministries; it is behind the Green Line in Israel proper; and Jerusalem has been the centre of Jewish hopes, prayers, and self-image for millennia. Israel’s capital will never be Tel Aviv and the international community knows and accepts this. Most Israelis greeted Trump’s decision with a shrug and a cheer: to them Jerusalem is Israel’s capital with or without American recognition, but Israelis are happy that recognition is happening nonetheless.

But non-recognition is not about West Jerusalem: it is about the city’s east. The Palestinians claim that half of the city, conquered by Israel in 1967, as their future capital, and the international community considers East Jerusalem occupied territory. No feasible two-state solution exists without Jerusalem serving as the capital of both states; final status offers from Ehud Barak in 2001 and Ehud Olmert in 2008 both included a Palestinian capital in East Jerusalem. Non-recognition is an acknowledgement of the fact that Jerusalem is unfinished business, and will remain so until a peace deal is signed.

And yet – despite claims by some commentators to the contrary, including tweets by Jeremy Corbyn and Nicola Sturgeon – Trump’s declaration did not grant full legitimacy to Israeli sovereignty over East Jerusalem either. “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,” the president said. “Those questions are up to the parties involved.”

Trump’s recognition is thus, essentially, a fudge. It is neither a full endorsement of Israel’s annexation of East Jerusalem, nor a complete rejection of it. Trump provided a gift to the Israeli right, and some red meat to his evangelical Christian base, without ruling out any of Mahmoud Abbas’ demands. It fundamentally changes nothing about the city’s status in a two-state negotiation, where division remains the only game in town.

Recognition is not, therefore, the death knell to the two-state solution that some have proclaimed. But Trump’s actions certainly make peace harder to achieve. This decision amounts to kamikaze diplomacy, making Trump’s lauded “ultimate deal” even less likely.

Critics of recognition highlight three strategic flaws. First, recognition of Israeli claims to Jerusalem – without even an acknowledgement of the equivalent Palestinian claim – further undermines what little credibility the president had to act as a fair and effective broker of a two-state agreement. Second, by granting Jerusalem formal recognition now, Trump has squandered key diplomatic leverage, granting Israel the rich symbolism of formal recognition for nothing in return. Above all, critics argue that unilateral recognition by international actors, either of Jerusalem or of a Palestinian state, demotivates both parties from returning to a process of meaningful negotiations.

In the meantime, Palestinians have been protesting across Jerusalem, the West Bank, and Gaza, but the Arab reaction is more “an explosion of sighs” than one of violence. The net result of Trump’s decision may change little on the ground, but it is further evidence, if it were needed, that the American president is unfit to lead on the world stage.