There is a fundamental misunderstanding, which is that if the US recognizes Jerusalem as capital of Israel, that would mean that the US recognizes Jerusalem as part of Israel.
However, the US embassy relocation legislation does not negate the status of Jerusalem’s status as a Corpus Separatum (Latin for “separated body”) as a term used to describe Jerusalem area in the 1947 United Nations Partition Plan for Palestine. According to that plan, still supported by the US, the city would be placed under international rule as part of any final resolution of the Middle East state of affairs..
As a journalist, I covered events in the US capitol when Congress passed the US embassy Jerusalem relocation bill in October 1995, also known as the “Jerusalem Embassy and Recognition Act”.
There were expectations at the time that the embassy move would mean hat the US would renounce its position, adopted in 1948, that Jerusalem was not to be recognized as a part of Israel and that Jerusalem must be an international zone.
However, the final version of the Jerusalem Embassy and Recognition Act removed all explicit references to Jerusalem as “part of Israel” , without mention that Jerusalem would remain the exclusive capital of Israel.
The late Faisal Husseini , who then headed the PLO Jerusalem committee, was present in Washington at the time , as was Yossi Beilin, then deputy foreign minister of Israel –
Both Husseini and Beilin endorsed the wording of Jerusalem Embassy and Recognition Act in 1995, as it was passed into law, which , as enacted, stated:
(1) Jerusalem should remain an undivided city in which the rights of every ethnic and religious group are protected.
(2) Jerusalem should be recognized as the capital of Israel.