JERUSALEM  — When President Trump recognized Jerusalem as the capital of Israel earlier this month, he called it a "long-overdue step to advance the peace process."

Yet the president's ill-timed Jerusalem speech has had exactly the opposite impact. It has undermined, probably fatally, the unlikely mission he assigned to his son-in-law Jared Kushner and lawyer friend Jason Greenblatt: to concoct the "ultimate" Israel-Palestinian peace deal.

On Wednesday, Palestinian leader Mahmoud Abbas rejected any future role for the United States as a mediator, and will refuse to meet Vice President Pence when he visits this city next week.

Moreover, by seeming to endorse long-term Israeli control of Islamic holy sites in Jerusalem's Old City, the president handed a cudgel to Israel's adversaries in Istanbul and Tehran while undercutting strategic allies in Cairo and Riyadh.

After speaking with prominent Israeli and Palestinian leaders in Jerusalem and Ramallah, it is easy to understand why the long-term repercussions of the president's unstrategic move are dangerous to both.

Let me start in Jerusalem, where Israeli leaders cheered Trump's speech and his promise to move the U.S. embassy to their capital (though no one thinks the move will happen for years).

There is a special reason that no prior president had recognized Jerusalem (and only the president, not Congress, has the power to do so).

There is no question that the western, Jewish sector of Jerusalem is Israel's capital.

But the status of Jerusalem's eastern, mostly Arab, sector, whose annexation by Israel is not recognized internationally, and its Old City, with sites holy to Christians, Muslims, and Jews, has always been a crucial element of any peace negotiation. Israel formally agreed with the Palestinian Authority that the future of the city would be such an element.

So when Trump spoke of recognizing Jerusalem without differentiating between  sectors, most countries saw this as ratifying Israel's stance that all of Jerusalem will remain under its control.  The caveat tacked to the end of Trump's speech – that the U.S. wasn't taking a position on Jerusalem's final boundaries – was dismissed as window dressing.

Israeli government officials make clear that they, too, believe the president endorsed their position.  "Jerusalem is 100 percent Israeli," Education Minister Naftali Bennett told me in his Knesset (parliament) office. "Trump's speech made good progress in removing [any other] illusion."

"Trump didn't just say 'West Jerusalem,'" echoed Agriculture Minister Uri Ariel, sitting in front of a blown-up photo of Jerusalem's Old City. "Everyone understood the meaning of his visit to the Western Wall [the holy Jewish site in the Old City] when he visited Jerusalem."

Palestinians heard Trump's speech the same way.

"He [Trump] has ended negotiations," said Mohammad Shtayyeh, a senior Palestinian economic minister who has long participated in negotiations with Israel.  "There is no way that Palestinians can work on other issues without Jerusalem.

"You are a mediator. You need to be an honest broker," Shtayyeh added over coffee in his office in Ramallah, the crowded West Bank city where Palestinian government offices are located. "Now you decide to take sides. Trump has taken himself out."

So it is not surprising, given the sensitivity of the Jerusalem issue, that a pressured Abbas demanded that the United Nations take over from the U.S. as mediator.  Palestinian leaders, who have held many meetings with Kushner and Greenblatt, feel betrayed. Trump promised him the "deal of our times," Abbas said this week. "Instead we got the slap of our times."

Nor is it surprising that an emergency conference of 57 Muslim nations in Istanbul on Wednesday, enthusiastically backed by Turkish President Recep Tayyip Erdogan and Iranian leaders, demanded that Trump rescind his Jerusalem stance.

Trump may scoff. But his raising of Jerusalem – in the time and manner he did – compelled Saudi King Salman to publicly insist that East Jerusalem must be the capital of a Palestinian state (despite rumors that Kushner's buddy, Crown Prince Mohammed bin Salman, endorsed the Israeli position).

Abbas has called for nonviolence, and so far there have been only relatively small demonstrations in Ramallah and Jerusalem.  The Old City is quiet for the moment. But the issue of Jerusalem's religious sites has the potential to spur violence even if Palestinian leaders don't want that to happen.

If Trump personally walks back his Jerusalem remarks, or refers to East Jerusalem as the potential Palestinian capital, things might calm down.  But it is hard to see how new negotiations can start without such a corrective.

And if negotiations for two states come to a permanent halt, Israel is headed towards a "one state" solution. That means  Arabs will soon outnumber Jews in the land from the Jordan River to the Mediterranean.

I will look at the realities of a one-state option in my next column, but suffice it to say they don't look good.