Papua New Guinea announced the opening of its embassy to Israel on Tuesday in Jerusalem, becoming the fifth country with a full diplomatic mission in the city, whose status is one of the Middle East's most sensitive issues.

With this move, Papua New Guinea joins the list of countries with embassies in Jerusalem, namely the United States, Kosovo, Guatemala and Honduras, while most countries maintain their diplomatic representation in the city of Tel Aviv.

The Palestinians want East Jerusalem, captured by Israel in a 1967 war and annexed despite international opposition, to be the capital of a Palestinian state.

Papua New Guinean Prime Minister James Marabe said Israel would pay for the embassy, which is located in a high-rise building in front of Jerusalem's largest shopping mall, for the first two years.

Israeli Prime Minister Benjamin Netanyahu attended the embassy opening ceremony as the peace process stalled and relations with Washington were uncertain.

Wasel Abu Yousef, a member of the Palestine Liberation Organization's Executive Committee, said Israel was looking "for a state, even if it is under the microscope, to say that there are countries that open embassies in Jerusalem."

Although Israel views Jerusalem as its eternal and indivisible capital and wants to move the headquarters of all embassies to it, most countries in the world do not recognize Israeli sovereignty over the entire city and believe that the status of this city must be resolved through negotiations.