Australian Prime Minister Scott Morrison told his Israeli counterpart Benjamin Netanyahu on Monday that the country is considering recognizing Jerusalem as Israel's capital and moving its embassy there.

Morrison conveyed the message to Netanyahu in a telephone conversation, the latter's office said, adding that the Israeli prime minister thanked Morrison for his remarks.

(The Old City of Jerusalem)

Speaking at a press conference in Canberra on Tuesday, Morrison said Australia remains committed to a two-state solution for Israelis and Palestinians, but found arguments for following in the footsteps of the United States "persuasive" and "achievable."

"We're committed to a two-state solution, but frankly, it hasn't been going that well, not a lot of progress has been made, and you don't keep doing the same thing and expect different results," Morrison said.

"So when sensible suggestions are put forward that are consistent with your policy positioning and in this case pursuing a two-state solution, Australia should be open-minded to this and I am open-minded to this and our government is open-minded to this."

The United States, under President Donald Trump, moved its embassy from Tel Aviv to Jerusalem in May after recognizing the hotly contested city as Israel's capital last December, angering the Palestinians and upsetting the Arab world.

Morrison said the idea of moving the Australian Embassy from Tel Aviv to Jerusalem was proposed by former Australian Ambassador to Israel Dave Sharma, who is now running in a by-election on Saturday for a parliamentary seat vacated by now-resigned former Prime Minister Malcolm Turnbull.

The Sydney electorate of Wentworth, in which the conservative Liberal Party candidate is running, has a large Jewish population and is crucial to the Morrison government's one-seat majority in the lower house.

Palestinians view East Jerusalem, captured by Israel in a 1967 war, as the capital of a future independent state and see the U.S. move as backing Israel's desire to cement its rule over the whole city.