Netanyahu tweeted afterwards that the Australian premier had "informed me that he is considering officially recognizing Jerusalem [al-Quds] as the capital of Israel & moving the Australian embassy to Jerusalem [al-Quds]".
Labor is concerned the approach could undermine the prospect of a two-state solution between Israel and Palestine.
However, Morrison said no decision had been made there had been no discussion on the matter with the United States, which has already moved its embassy to Jerusalem.
Morrison's Liberal government holds only a one-seat majority and a loss in the election would eviscerate it.
Despite the controversial move, Morrison appeared to voice his commitment to a two-state solution to the Israeli-Palestinian conflict. "I think we have to challenge that", he said.
Shanghai Masters: Federer Beaten, Djokovic Into Final
Anderson had a chance to take an early lead against Djokovic but he overhit a forehand on set point in the 12th game of the match. Coric didn't offer Federer a break point opportunity, while managing to break Federer's serve in the opening game of both sets.
Morrison told Parliament that he had briefed Jokowi overnight about the announcement.
Indonesia, the world's largest Muslim-majority nation, and Australia are due to sign a trade deal this year.
Mr Marsudi said: "Indonesia asks Australia and other countries to support peace talks and not take steps that would threaten that peace process and stability of world security".
"If he has to throw Australia under a bus in order to preserve that position, that is something he would have to give consideration to".
Morrison, an evangelical Christian, denied the potential embassy switch was motivated by domestic politics, his religious beliefs, or that Australia's main strategic ally, the USA, had influenced the decision.
In May, the United States moved its embassy from Tel Aviv to the holy city despite indignation throughout the Arab world and protests within the Palestinian territories, which left 60 demonstrators dead.
Coric stuns Federer in Shanghai, faces Djokovic in final
Federer won the Australian Open at the start of this year but has had a mediocre season by his sky-high standards. Djokovic won a record fourth Shanghai Masters title with a 6-3 6-4 win over 13th-seeded Borna Coric on Sunday.
The opposition centre-left Labor Party denounced Morrison's announcement.
Morrison's openness to recognizing Jerusalem and moving Australia's embassy there comes four days before a by-election in Sydney at which his center-right coalition runs the risk of losing its tenuous hold on power.
"The people of Wentworth, and all Australians, deserve a leader who puts the national interest ahead of his self-interest, and governs in the best long-term interest of the nation", she added.
Relations between Australia and Indonesia have been damaged by a series of scandals and spats over the decades but improved under Morrison's predecessor Malcolm Turnbull, who lost his job in a leadership coup in August.
"I have made this decision without any reference to the United States". They suspected that the politician was trying to make some political gains, which "would surely be outweighed by the detriment both to Australia's global standing and in its relations with Arab and Muslim-majority countries".
Have 19 hours? World's longest commercial flight takes off
A Singapore Airlines flight from Singapore to NY , deemed as the world's longest non-stop flight, is set to take off on Thursday. By using this system, the plan burns 25 percent less fuel as compared to the other aircraft with the similar size, said Airbus.