The United States Supreme Court ruled on Monday that the Americans who are born in the city of Jerusalem cannot list Israel as their place of birth on their passports.
The court, with a 6-3 majority, decided that the US Congress exceeded its authority in passing a passport law in 2002 to force State Department to change its decades long policy and accept Israel as the birthplace of citizens born in Jerusalem.
The US government does not recognise Jerusalem as part of Israel’s territory and classifies the historical city as a disputed land and has its embassy in Tel Aviv.
Majority of the judges argued that the White House has the authority to recognise foreign governments, and therefore has the final say on what is written on the passports.
"Put simply, the nation must have a single policy regarding which governments are legitimate in the eyes of the United States and which are not," Justice Anthony Kennedy wrote expressing the majority opinion.
"Recognition is a topic on which the nation must speak with one voice. That voice must be the president's."
The legal process has started when parents of Menachem Zivotofsky, a 12-year-old Jerusalem born US citizen, wanted to put Israel as his birthplace.
The decision came at a time when the relations between Israel and the US are strained due to the two country’s disagreement over a possible deal with Iran to curb its nuclear programme.
Following the decision, Israel's government declined to comment saying it is a ruling by a foreign court.
US State Department spokesman Jeff Rathke said “we remain committed" to the policy on the neutrality of Jerusalem and the ruling "confirms the long-established authority of the president over the conduct of diplomacy and foreign policy."
Saeb Erekat, who was the chief negotiator representing Palestine in Oslo negotiations, said the decision was very important.
"It is a clear message to the Israeli government that its decisions and measures in occupying and annexing Jerusalem are illegal and void and that it should immediately stop these measures because it's a clear violation of the international law," Erekat said.
Israel has captured East Jerusalem in 1967 and has been controlling the whole city since then, claiming it is “the eternal capital of the state of Israel” against UN resolutions.
Palestinians want to establish East Jerusalem as capital of their state and ask Israel to stop its occupation.