Moscow appears ready to recognize West Jerusalem as the capital of Israel, according to a statement published on the Russian Foreign Ministry's website.
"We reaffirm our commitment to the U.N.-approved principles for a Palestinian-Israeli settlement, which include the status of East Jerusalem as the capital of the future Palestinian state," the Thursday statement read.
"At the same time, we must state that in this context we view West Jerusalem as the capital of Israel," it added.
Israeli media interpreted the statement as a major shift in Russian policy, which has traditionally maintained that Jerusalem should be placed under international sovereignty in any future settlement.
According to Israeli daily The Jerusalem Post, Russia's intention to recognize West Jerusalem as the capital of the Jewish state is to go into effect immediately.
The newspaper also reported that Russia's ambassador to Israel intends to meet with officials from the Israeli Foreign Ministry to discuss the decision.
The same paper went on to note, however, that Israeli officials had "interpreted this [Russian statement] to mean that recognition of West Jerusalem as Israel's capital will only come once East Jerusalem becomes the capital of the Palestinian state."
Israel and Russia have drawn closer together in recent years. Russian President Putin and Netanyahu met in June 2016, when Putin called Israel a "key country" for the Middle East. They agreed to set up a "hotline" to avoid accidental clashes between their forces, and the Israeli premier said further discussions would be held on the issue this week. During a visit to Jerusalem in November, Russian Prime Minister Dmitry Medvedev spoke of a "close friendship" between the two countries. However, Russian-Israel relations have been overshadowed by Moscow's alliances with Syria and Iran, which are both enemies of Israel.
During the 2016 U.S. presidential campaign, President Donald Trump's team spoke often about moving the U.S. embassy to Jerusalem. But since taking office, the contentious issue appears to have moved to the backburner. Trump hasn't yet formulated a policy on the Israeli-Palestinian conflict, but has said he is eager to broker a deal. His initial comments, including a campaign promise to move the U.S. Embassy in Israel to contested Jerusalem and suggestions that there are alternatives to a two-state solution, caused alarm among some Arab leaders.
However, an embassy move no longer appears imminent, and some Trump administration officials have since endorsed the two-state solution. The relocation is strongly opposed by many U.S. allies as the Palestinians also claim the city as their capital.
Israel occupied the West Bank, including East Jerusalem, during the 1967 Middle East War. It annexed the entire city in 1980, claiming it as Israel's "eternal" capital - a move never recognized by the international community. International law views the West Bank and East Jerusalem as "occupied territory" and considers all Jewish settlement-building activity on the land to be illegal. Palestinians accuse Israel of waging an aggressive campaign to "Judaize" the historic city with the aim of effacing its Arab and Islamic identity and driving out its Palestinian inhabitants.