Why won't Obama admit Jerusalem is the capitol of Israel?

The law says Jerusalem is the capitol of  Israel, so why is the Obama administration so reticent to say so? In an interview with State Department spokeswoman, Victoria Nuland, the administration may have tipped its hand with regard to its policy with Israel. 

WASHINGTON, DC (Catholic Online) - Nunland's exchange with reporters went so:

Q:  Is it the view of the - of the United States that Jerusalem is the capital of Israel, notwithstanding the question about the embassy - the location of the U.S. embassy?

MS. NULAND:  We are not going to prejudge the outcome of those negotiations, including the final status of Jerusalem.

Q:  Does that - does that mean that you do not regard Jerusalem as the capitol of Israel?

MS. NULAND:  Jerusalem is a permanent-status issue.  It's got to be resolved through negotiations.

Q:  That seems to suggest that you do not regard Jerusalem as the capitol of Israel.  Is that correct or not?

MS. NULAND:  I have just spoken to this issue -

Q:  (Inaudible.)

MS. NULAND:  - and I have nothing further to say on it.

Q:  You've spoken to the issue -

MS. NULAND:  Yeah.

Q:  - but (haven't answered ?) the question.  And I think there's a lot of people out there who are interested in hearing a real answer and not saying - and not trying to duck and say that this has got to be resolved by negotiations between the two sides.

MS. NULAND:  That is our -

Q:  What is the capitol of Israel?

MS. NULAND:  Our policy with regard to Jerusalem is that it has to be solved through negotiations. That's all I have to say on this issue.

Many have speculated previously that Obama is at best a lukewarm supporter of Israel and their policies in the region. And while Obama publicly states that Israel and the US remain close allies, the strength of that alliance is receiving scrutiny as the administration seems to repeatedly slight the Jewish state. 

The CIA World Factbook lists Jerusalem as the national capitol. As does the state of Israel -- who rightfully ought to be allowed to pick. So what's the problem?

As always, the devil is in the details. 

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