Israeli Prime Minister Benjamin Netanyahu said on Monday that recognising Jerusalem as his country's capital "makes peace possible", after widespread international criticism of the US decision to do so.

US President Donald Trump's announcement last week has been followed by days of protests and clashes in the Palestinian territories as well as demonstrations across the Islamic world.

The EU expressed alarm at the decision, which upends seven decades of US policy on the disputed holy city, and the bloc's foreign ministers are set to urge Netanyahu to resume dialogue with the Palestinians as he meets them over breakfast in Brussels.

Read: This will not bring peace to Israel — quite the opposite

The Israeli premier said what Trump had done was to "put facts squarely on the table" by acknowledging Jerusalem had been the capital of the Israeli state for 70 years and of the Jewish people for 3,000 years.

"It doesn't obviate peace, it makes peace possible, because recognising reality is the substance of peace, it's the foundation of peace," he said in a statement alongside EU diplomatic chief Federica Mogherini.

Mogherini, who last week warned the Jerusalem decision could take the situation "backwards to even darker times", restated the EU's position that a two-state solution with Jerusalem as capital for both Israelis and Palestinians was the only sustainable way to resolve the conflict.

Netanyahu pointed to a new US peace initiative as a possible way forward.

Explore: Why Trump, unlike the presidents before him, went through with his promise on Jerusalem

"There is now an effort underway to bring forward a new peace proposal by the American administration. I think we should give peace a chance. I think we should see what is presented and see if we can advance this peace," he said.

Trump's son-in-law and senior adviser Jared Kushner has been working with a small team to develop a new US proposal to revive peace talks between Israel and the Palestinians, but it is not clear what progress he is making.

Netanyahu's visit to Brussels comes after he met French President Emmanuel Macron in Paris on Sunday. Macron called on him to freeze settlement building and to re-engage with Palestinians.

Both Israelis and Palestinians claim Jerusalem as their capital and previous peace plans have stumbled over debates on whether and how to divide sovereignty or oversee holy sites.

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