What does Trump's Jerusalem plan mean for the peace process?

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What does Trump's Jerusalem plan mean for the peace process?

The 'Special Report' All-Star panel weighs in.

This is a rush transcript from "Special Report with Bret Baier," December 6, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: I have determined that it is time to officially recognize Jerusalem as the capital of Israel. This is nothing more or less than a recognition of reality. It is also the right thing to do. It's something that has to be done. That is why, consistent with the Jerusalem Embassy Act, I am also directing the State Department to begin preparation to move the American embassy from Tel Aviv to Jerusalem.

SAEB EREKAT, PALESTINIAN DIPLOMAT: I think tonight, he is strengthening the forces of extremists in this region as no one has done before.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: President Trump making a big announcement today at the White House, following through on a campaign pledge. Other presidents have campaigned on that and mentioned it, but it's never gone this far, to move the U.S. embassy from Tel Aviv to Jerusalem and make Jerusalem, to have the U.S. acknowledge Jerusalem as the capital of the state of Israel.

As you can imagine, this is getting in the Arab world a lot of pushback, but not just there. You see these 18 countries warning the U.S. against moving the embassy, and they include Belgium, France, Germany, Ireland, Luxembourg, Russia, and the United Kingdom. And specific warnings against recognizing Jerusalem as Israel's capital, Egypt saying it would complicate the Middle East process, potentially dangerous repercussions from Jordan, Palestinians, "dangerous" was the word, Saudi Arabia, detrimental to peace process, and Turkey says it threatens to sever ties with Israel.

That said, a lot of praise from the move from evangelicals, from Jewish leaders. It's a mixed bag across the world.

Let's bring in our panel: Steve Hilton is a former advisor to British Prime Minister David Cameron and host of "The Next Revolution" here on Fox News Channel; Rachael Bade, congressional report for Politico, and Byron York, chief political correspondent of the Washington Examiner.

All right, Steve, your thought of how this was laid out and the reaction?

STEVE HILTON, FOX NEWS: Bret, when I saw the chorus of disapproval, I think it was more against than for today. When you've got the Chinese against it, the French against it, the E.U. against it, all the foreign policy establishment it seems against it, my instinctive reaction was I am for it because at least it's a change from the status quo that has basically failed that all the people that are against this have defended.

But I've got another point I wanted to make, which is that it is something that just mystifies me why the hell they have weighed in at this point. When you think about why Donald Trump was elected last year, it was to get the economy moving, to bring back jobs, to raise wages, to look after those people, the forgotten men and women that we hear all about and to get their prospects on the rise.

People who supported him on that basis must be wondering, we didn't elect you to mess around in the Middle East. Once you have dealt with the problems here at home, then maybe turn to this. And I think there are a lot of them a lot of populists who supported President Trump who wanted from him for the first time in many years a pro-worker policy agenda will be infuriated by yet another distraction from delivering that.

BAIER: Rachael, you had some Democrats up on Capitol Hill who previously had called for this very move, putting out statements criticizing the move.

RACHAEL BADE, POLITICO: I would say from Congress the overwhelming reaction from Republicans was very positive, even Chuck Schumer, the Democratic leader in the Senate, did praise this move. However, you talk to -- there's a reason people of talked about this for years and not done it, and that is because peace advocates in the region have made this case that if you recognize Jerusalem as the capital of Israel you give Israel something they want that has brought them to the bargaining table, to the negotiating table to reach a peace accord with the Palestinians.

So a lot of reaction on that. We are hearing Nancy Pelosi came out against it. I also think it's interesting from a White House standpoint, it's sort of risky for them because Jared Kushner is trying to strike an accord between Israel and Palestine, and basically this could have a blowback. And from what we are hearing for the White House, it sounds like they think, yes, there's going to be seen negative reaction to it in the Middle East right now, but apparently Jared Kushner is convinced that that will die down and the peace process will continue.

BAIER: Byron?

BYRON YORK, WASHINGTON EXAMINER: This is one of these things where we've been doing something one way for 25 years and it hasn't worked. And someone proposes to do something differently and the crowd goes no, no, you can't change the way we've been doing things.

And Trump has essentially called the bluff of all those people in the government, in the U.S. government, who have they supported this change and then not wanted to actually do it. You heard him in that sound bite refer to the Jerusalem Embassy Act passed by Congress in 1995 saying to relocate the U.S. embassy in Jerusalem, passed with 93 votes in the Senate, 374 votes in the House. This was overwhelmingly approved. It has been reaffirmed since then, and Trump is simply calling the bluff.

On the other hand, kind of like what he's done with the Iran nuclear deal, the Paris climate accord, he is kind of doing it gradually. He's not tomorrow. He actually signed another waiver for, to keep the embassy in Tel Aviv for another period of time, and he set us in the course of doing this without doing it in an abrupt way. So he's getting a lot of support, as you mentioned, from Republicans for doing this.

BAIER: And here the leaders on the ground, Israel and the Palestinians, reaction today.

(BEGIN VIDEO CLIPS)

ISRAELI PRIME MINISTER BENJAMIN NETANYAHU: Profoundly grateful for the president and his courageous and just decision to recognize Jerusalem as the capital of Israel and to prepare for the opening of the U.S. embassy here. This decision reflects the president's commitment to an ancient but enduring truth to fulfilling his promises and to advancing peace.

EREKAT: He is in total violation of international law, human rights, and he is turning the conflict between Palestinians and Israelis from a political one into a religious one.

(END VIDEO CLIPS)

BAIER: Steve?

HILTON: Funny enough, it's the same as with so many of these decisions that he makes, I complete agree with Byron where he goes out against the prevailing wisdom, the elite's view of how things should be done. The overreaction from the critics and from the establishment actually pushes people into the president's account. When I see some of those responses, this is a finely balanced argument. There are really good arguments on both sides. It's not an easy judgment. I happen to agree with it. I think it's the right move. My only question is, why did they have to do this now?

But when you see the overreaction from the other side, I think it actually strengthens the resolve of the president to keep making decisions like this.

BAIER: I think this wraps it up. Longtime nemesis on the campaign trail Jeb Bush tweeted out "Jerusalem is the capital of Israel and I applaud POTUS for seeing through America's promise to relocate its embassy there. This is an important show of solidarity with Israel, one of our nation's greatest allies." They haven't always been allies, Jeb Bush and Donald Trump. We'll leave it there.

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