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On the one hand, most Westerners have no trouble acknowledging that come what may, Israel has a right to part of Jerusalem; so siting the embassy there wouldn't be a problem, but would provoke outcries from those who believe that Israel has no right to any of Jerusalem, or who think that by siting the embassy in the pre-67 Israeli part would somehow support claims to the post-67 'unification' of the city by Israel.
On the other hand, most Westerners might well have a problem, usually citing "final status negotiations"--as though those are expected to change the status of west Jerusalem. Hence the law, as written (from 1995), not only demands that the Secretary of State, every 6 months, provide a report on how the implementation of the law requiring that the US move its embassy from Tel Aviv to Jerusalem is coming along, but also provides for a presidential waiver on the grouns of "national security". Of course, siting the embassy is an Executive decision; the Congress stipulated the move by using the power of the purse.
From The Jerusalem Embassy Act of 1995, for which McCain, being in Congress at the time, almost certainly voted (it was adopted on October 23, 1995, Senate vote was 93-5 and the House vote was 374-37--most dems voted for it, too):
"(a)Waiver Authority.—(1) Beginning on October 1, 1998, the President may suspend the limitation set forth in section 3(b) for a period of six months if he determines and reports to Congress in advance that such suspension is necessary to protect the national security interests of the United States. (2)The President may suspend such limitation for an additional six month period at the end of any period during which the suspension is in effect under this subsection if the President determines and reports to Congress in advance of the additional suspension that the additional suspension is necessary to protect the national security interests of the United States. (3)A report under paragraph (1) or (2)shall include— (A)a statement of the interests affected by the limitation that the President seeks to suspend; and (B)a discussion of the manner in which the limitation affects the interests. (b)Applicability of Waiver to Availability of Funds.—If the President exercises the authority set forth in subsection (a) in a fiscal year, the limitation set forth in section 3(b) shall apply to funds appropriated in the following fiscal year for the purpose set forth in section 3(b)except to the extent that the limitation is suspended in such following fiscal year by reason of the exercise of the authority in subsection (a).
In 2003 a measure passed urging the president to implement the move, but not changing anything.
In other words, all McCain's saying he's doing is to stop certifying that it's not in the security interests of the US to move the embassy. Obama, presumably, would continue to certify that it's not in the US's security interest to move.
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