Jerusalem must be the capital of both Israel and the future state of Palestine, French President Francois Hollande told the Israeli parliament on Monday.
"France's position is known: a negotiated settlement, with the state of Israel and (the state) of Palestine both having Jerusalem as capital, coexisting in peace and security," he said.
Israel seized the mostly Arab eastern sector of the Holy City during the 1967 Six Day War and later annexed it in a move never recognised by the international community.
It considers all of Jerusalem to be its "eternal and indivisible capital" and has vowed never to let the city be re-divided.
The Palestinians have insisted east Jerusalem be the capital of their future state, making the city's fate one of the thorniest issues of the decades-long conflict.