U.S. Vice President Mike Pence pointedly referred to Jerusalem as Israel\u2019s capital on Monday as he met the country\u2019s leader, further vexing Palestinians who have already snubbed his visit over a U.S. policy shift towards the holy city.\r\nPresident Donald Trump last month acknowledged Jerusalem as the capital of Israel and said he would move the U.S. embassy there - dismaying Palestinians who claim the eastern part of the city and angering Arab states across the region.\r\nPence, who is part-way through an official visit to the Middle East, said in Egypt on Saturday and again in Jordan on Sunday that Washington would support a two-state solution for Israelis and Palestinians if they both agreed to it. (nL1N1PF0FQ)\r\nOn Monday he said he was honoured to be \u201cin Israel\u2019s capital, Jerusalem\u201d at the start of talks with Prime Minister Benjamin Netanyahu.\r\nEchoing that sentiment, Netanyahu told the vice president. \u201cThis is the first time that I stand here where both leaders can say those three words: \u2018Israel\u2019s capital Jerusalem.'\u201d\r\nPence said Trump\u2019s declaration, which most of America\u2019s main allies beyond the Middle East have also criticized, provided new opportunities for Israeli-Palestinian peace.\r\n\u201cI also am here hopeful that we are at the dawn of a new era of renewed discussions to achieve a peaceful resolution to the decades-long conflict that has affected this region,\u201d Pence said.\r\nPalestinian President Mahmoud Abbas, who has called the declaration a \u201cslap in the face\u201d, left for an overseas visit before the vice president\u2019s arrival.\r\n\u201cThe American recognition of Jerusalem as Israel\u2019s capital and the occupation are illegitimate. The American administration must not contribute to escalating the situation further,\u201d said Nabil Abu Rdainah, a spokesman for Abbas, after Pence\u2019s remarks.\r\nPalestinians want East Jerusalem, including the walled Old City with its holy sites, as capital of their own future state.\r\nIsrael, which annexed East Jerusalem after capturing it in 1967 in a move not internationally recognized, regards all of the city as its \u201ceternal and indivisible capital\u201d.\r\nReuters.