Indonesia was taken aback in October 2018 when prime minister Scott Morrison, in the lead-up to the Wentworth byelection, raised the prospect of a controversial relocation of the Australian embassy to Jerusalem in what would have mirrored then United States president Donald Trump’s decision to move the American embassy to the holy city from Tel Aviv.

The shock forecast, which was made as Palestinian Foreign Minister Riyad al-Maliki happened to be on an official visit to Jakarta, delayed the signing of Australia’s free trade agreement with Indonesia.

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While the proposed embassy shift was called off two months later, Morrison went ahead with recognising West Jerusalem as Israel’s capital.

That decision followed Trump’s declaration of Jerusalem as the Israeli capital but was reversed last year by the Albanese government, which must now grapple with whether to take the next step in acknowledging a Palestinian state.

John McCarthy, a former Australian ambassador to Indonesia, the US, Japan, Vietnam and Thailand and an ex-Australian high commissioner to India, said such a call would be met very positively in Jakarta.

“[To Indonesians] it would show enhanced Australian understanding of global south perspectives rather than placing overwhelming emphasis on the relationships with the US, the Quad and China and the mechanisms that are pertinent to those relationships,” he said.

“It would be showing a broader Australian perspective than would have been suggested in the past few years.”

Teuku Faizasyah, a spokesman for Indonesia’s Ministry of Foreign Affairs, said it did not comment on political discourse in Australia.

“For Indonesia, [a] two-state solution is the only solution,” he said.