Brussels - The European Union's chief diplomat voiced "serious concern" at US President Donald Trump's decision to recognise the disputed city of Jerusalem as Israel's capital.

"The aspirations of both parties must be fulfilled and a way must be found through negotiations to resolve the status of Jerusalem as the future capital of both states," Federica Mogherini said late Wednesday, referring to Israelis and Palestinians.

The EU's concern was based on Trump's announcement "and the repercussions this may have on the prospect of peace," she said, noting that the bloc stands ready to support such a process and will continue to engage with both sides.

"The EU calls on all actors on the ground and in the wider region to show calm and restraint in order to prevent any escalation," Mogherini added.

"The focus should remain on creating conditions for direct and meaningful negotiations that can resolve all final status issues. The EU reiterates its firm commitment to the two-state solution."