The dramatic U.S. policy shift on contested Jerusalem is seen by the Western-backed Palestinian leadership as a dangerous betrayal and game changer that is bound to propel them into a risky confrontation with the U.S. and Israel on the global stage.
Palestinian leader Mahmoud Abbas hasn't decided yet whether to formally abandon U.S.-led negotiations with Israel, a troubled process that after two decades has failed to bring the Palestinians closer to statehood. However, those close to Abbas say a Mideast era of stop-and-go negotiations and Washington's monopoly as mediator is now over.
Here is a look at what could come next.
WHY JERUSALEM MATTERS
Trump's recognition Wednesday of Jerusalem as Israel's capital contradicts longstanding international assurances to the Palestinians that the fate of the holy city will be determined in negotiations. With Trump's sharp pivot, the U.S. is seen as siding with Israel, which claims all of Jerusalem, including the Israeli-annexed eastern sector the Palestinians seek as a future capital.
The dispute over Jerusalem forms the core of the Israeli-Palestinian conflict, but transcends a mere real estate argument. The city, home to Judaism's holiest site, is also sacred to billions of Muslims and Christians worldwide, and perceived slights to their claims have triggered major protests or violence in the past.
ABBAS' RESPONSE SO FAR
Abbas has been trying to rally international support, reaching out to leaders from Pope Francis to the EU foreign policy chief and Arab leaders. He warned Trump in a phone call that the U.S. shift will rock the region and threaten Washington's plans for a Mideast peace deal.
In a speech after Trump's announcement, Abbas said the U.S. has effectively removed itself from any role as a Mideast broker, but he did not say what immediate steps, if any, the Palestinians plan to take.
Abbas is to hold internal consultations with officials from the Palestine Liberation Organization and his Fatah party, and plans to meet Thursday with his closest Arab ally, King Abdullah II of Jordan.
A MOMENT OF TRUTH?
The crisis over Jerusalem may push Abbas, the most steadfast Palestinian champion of seeking statehood through negotiations, to a point he avoided for so long - acknowledgment that the "peace process" isn't working, at least in its current format.
Critics have argued that endless negotiations mainly serve Israel by providing diplomatic cover for its expansion of settlements on war-won lands. Abbas also derived some political legitimacy from the process, positioning himself as the only leader with a shot at delivering statehood.
Trump says he remains committed to brokering a Mideast deal, despite the Jerusalem pivot. However, those close to Abbas say it's time to look for alternatives.
Any talks with U.S. officials are now "superfluous and irrelevant," said Hanan Ashrawi, a senior PLO official. "The peace process is finished."
Abbas has warned in the past that a failure to achieve a so-called two-state solution could prompt Palestinians to pursue a single state for two peoples, a prospect most Israelis reject.
The Palestinian leader may be reluctant to break away from his longstanding policies or lack the political courage to do so, but not shifting course now would be worse, said analyst Bassem Zbaidi.
"It's time for the Palestinians to say no before coming under pressure to accept" future U.S. proposals that could fall far short of their minimal demands, he said.
Some PLO and Fatah officials suggested shifting from cooperation with the U.S. and avoidance of conflict with Israel to a more confrontational approach.
Fatah supports halting contacts with the U.S. Consulate in Jerusalem, closing the PLO office in Washington and filing a complaint against the U.S. at the U.N. Security Council over plans to start a multi-year process of moving the U.S. Embassy in Israel from Tel Aviv to Jerusalem, said senior Fatah official Nasser al-Kidwa.
The Palestinians could also try to press prosecutors at the International Criminal Court to charge Israeli leaders with war crimes, including over settlement building, others said.
Abbas has refrained from such a step until now, under apparent U.S. pressure.
The International Criminal Court prosecutor is currently conducting a preliminary examination of the situation in the Palestinian territories, but this is a more open-ended review and could take years. The probe was triggered by "Palestine" becoming a member state of the court. The status change, in turn, was made possible by the 2012 U.N. General Assembly recognition of a state of Palestine in the West Bank, Gaza Strip and east Jerusalem, the lands Israel captured in 1967.
HELP FROM EUROPE?
The Palestinians are increasingly looking to Europe for help, encouraged by the harsh criticism of Trump's Jerusalem policy by European leaders.
European states in the past were relegated by Washington to the role of paymaster, sending hundreds of millions of dollars in aid to support the Palestinian self-rule government and help manage the long-running conflict.
European states often take a more critical view of Israeli policies than the U.S, especially on settlements, but have failed to challenge Washington's monopoly as mediator.
Palestinians now hope the growing rift between European leaders and the U.S. over Jerusalem will earn them diplomatic points. An immediate goal is to persuade influential Western European countries to recognize a state of Palestine.
RISK OR OPPORTUNITY?
For Palestinians, Trump's policy shift offers both risk and opportunity.
Jerusalem has repeatedly been a flashpoint for violence, and Palestinian protest marches planned later this week could lead to clashes with Israeli troops.
Such confrontations can spin out of control, as they did more than a decade ago when they escalated into an armed uprising. Abbas staunchly opposes violence as counterproductive, but he may not be able to contain widespread public anger.
Some say Trump's policy shift may create a moment of clarity and help end years of paralysis - by making it impossible to perpetuate the idea that statehood is possible under the old paradigm.
"That option is now off the table and that's a good thing," said Diana Buttu, a former legal adviser of the Palestinian self-rule government. "This had really held us up for so many years."
Associated Press writer Mohammed Daraghmeh in Gaza City, Gaza Strip, contributed to this report.
Laub, the AP bureau chief for Jordan, has covered the Israeli-Palestinian conflict since 1987.