US officials say the process of moving the embassy would take at least six months and involve major adjustments in security, office and housing space and staffing at both the existing facility in Tel Aviv and the consulate general in Jerusalem.
The US said its policy on Jerusalem has not changed and that Jerusalem's status must be negotiated between Israelis and Palestinians.
If Trump signs the waiver, he will break an election promise he made to move the embassy to Jerusalem. Lawmakers later passed the Jerusalem Embassy Act in 1995, signed into law by President Clinton, which authorized the U.S.to move the embassy to Jerusalem by 1999 with one caveat - the president could indefinitely delay the move by signing a waiver, citing national security concerns.
Of the embassy, Spicer said, "The question is not if that move happens, but only when".
A senior administration official said Wednesday that Trump still supports the move but believes with the possibility of peace between Israel and the Palestinians at hand, now may not be the best time to anger the Palestinians by moving the embassy to contested land. Presidents of both parties have renewed the waiver every six months for years.
The Palestinians praised Mr Trump's decision, saying it strengthens the chances of peace.
UN Security Council vows sanctions over N. Korea missile test
Monday morning, Putin called the test "counter-productive and risky ". A closed-door emergency Council session was set for tomorrow. Guam is 3,400 km from North Korea.
And Abbas has long said moving the embassy to Jerusalem could shatter chances for peace talks. "We are serious and genuine about achieving a just and lasting peace". Israel declared the city its undivided capital but the Palestinians claim East Jerusalem as the capital of a future Palestinian state.
Israel re-captured East Jerusalem and the West Bank from Jordan during the 1967 Six Day War and later annexed it, in a move never recognized by the worldwide community.
But Netanyahu's office said Israel appreciated Trump's statement of "friendship". Trump avoided any public mention of a potential embassy move during his visit to Israel and the West Bank in May.
The status of Jerusalem is one of the major stumbling blocks.
A senior administration official told CNN Thursday that the embassy will move when conditions are right.
Trump was facing a Thursday deadline to either waive or comply with a law requiring him to move the embassy. The announcement postpones the president's campaign promise to move diplomatic operations to Jerusalem. Moving the U.S. Embassy to Jerusalem has never been the highest issue on any Israeli government's agenda, observers say. He was in the process of negotiating peace with the Palestinians, who also had political claims to Jerusalem.