Israel's leader said Monday the US decision to recognise Jerusalem as the Jewish state's capital "makes peace possible" as he faced renewed pressure from Europe to reboot the Middle East's moribund peace process.

Prime Minister Benjamin Netanyahu said the move by US President Donald Trump -- which prompted diplomatic alarm and street protests across the Islamic world -- had "put facts squarely on the table".

He spoke as he arrived for talks at the EU, where the bloc's diplomatic chief Federica Mogherini urged Israel to find a "sustainable and comprehensive solution" to the decades-long conflict with the Palestinians.

The EU expressed alarm last week at the US decision, but Netanyahu said Trump had "put facts squarely on the table" by acknowledging Jerusalem had been the capital of the Israeli state for 70 years and of the Jewish people for 3,000 years.

"It doesn't obviate peace, it makes peace possible, because recognising reality is the substance of peace, it's the foundation of peace," he said in a statement alongside Mogherini ahead of a breakfast meeting with EU foreign ministers.

lestinians following widespread protests over the US move.

The Jerusalem decision upended decades of US diplomacy and broke with international consensus. Mogherini last week warned it could take the situation "backwards to even darker times".

Mogherini said the EU -- the Palestinians' largest donor -- would step up efforts with the two sides and regional partners including Jordan and Egypt to relaunch the peace process.

"We believe it is in Israel's interest, especially in the security interest of Israel, to find a sustainable and comprehensive solution to the Israeli-Palestinian conflict," Mogherini said.

Netanyahu has praised Trump's decision as "historic" and he explained Sunday that Jerusalem "has always been our capital and it has never been the capital of any other people".

Both Israelis and Palestinians claim Jerusalem as their capital and previous peace plans have stumbled over debates on whether and how to divide sovereignty or oversee holy sites.

Mogherini also condemned attacks on Israel -- after Netanyahu took aim over the weekend at what he called Europe's "hypocrisy" for condemning Trump's statement, but not "the rockets fired at Israel or the terrible incitement against it".

"Let me condemn in the strongest possible way all attacks on Jews everywhere in the world, including in Europe, and on Israel and on Israeli citizens," Mogherini said.

Netanyahu pointed to a new US peace initiative as a possible way forward.

"There is now an effort under way to bring forward a new peace proposal by the American administration. I think we should give peace a chance. I think we should see what is presented and see if we can advance this peace," he said.

Trump's son-in-law and senior adviser Jared Kushner has been working with a small team to develop a new US proposal to revive peace talks between Israel and the Palestinians, but it is not clear what progress he is making.

- EU not unified -

Most EU members, including the bloc's biggest countries, have expressed alarm over the Trump administration's policy shift.

Alongside Netanyahu on Monday Mogherini repeated Europe's stance that "the only realistic solution" for peace is two states -- Israel and Palestine -- with Jerusalem as the capital of both and the borders returned to their status before the 1967 Arab-Israeli War.

But the 28-member block is not unified on the issue -- Hungary, Greece, Lithuania and the Czech Republic in particular favour warmer ties with Israel.

And last week Hungary broke ranks to block a joint statement from the EU that was critical of Washington's Jerusalem shift.

Trump's announcement on Wednesday has been followed by days of protests and clashes in the Palestinian territories.

Four Palestinians were killed either in clashes or from Israeli air strikes in retaliation for rockets fired from the Gaza Strip.

Tens of thousands have also protested in Muslim and Arab countries, including Jordan, Turkey, Pakistan and Malaysia.

Macron was also asked if France would attempt to launch another peace initiative to resolve the Israeli-Palestinian conflict following failed efforts in the past.

"There's a desire by the Americans to mediate which remains and I don't want to condemn it ab initio (from the beginning)," he said. "We need to wait for the next few weeks, the next months to see what will be proposed.