Will Trump's decision spawn violence and protests? I'm sure. And for that reason, I would be hesitant to make the same decision. But aside from that, there is no reason not to recognize Jerusalem as Israel's capital.
I don't know how Palestinian Christians feel about Israel as a nation, but seeing as Jerusalem has historically been the capital for the Israelis and has never ceased to be recognized as their capital by them, only by other countries, then they have every right to call their capital their capital.
No other people group from the Israel area has kept their lineage clear enough to have any claim to the land. Other people groups intermixed and assimilated over time. But the Israelites were told by God to keep themselves separate, and many of them did (though not all, of course).
If you happen across Facebook accounts from the Middle East right now you will find many people sticking an image of the Dome of the Rock in the corner of their profile picture. I believe this explains the real core of the issue. Looking at the history of Islam, Muhammad initially instructed everyone to pray in the direction of Jerusalem and to worship Yahweh, but at some point he heard a "voice" telling him to pray toward Mecca instead. The people who refused to stop honoring Jerusalem and Yahweh would be considered rebels and those who joined him in praying toward Mecca were the new chosen people. So, really, it is a twisted irony that the people still devoted to worshiping the same God that Muhammad used to worship are suddenly being called apostates by him and his followers.
It's almost like Gentiles Believers calling themselves the new chosen people, as if God doesn't even recognize the Jewish people as anything unique anymore. I don't think that's the case. The Bible clearly states that the Gentiles were grafted into the "olive tree". Romans 11:11-24 has some helpful insight on that. Gentiles are now part of the tree, but the original branches are still there and will always be considered special and important.
This particular passage is intriguing and should challenge us Gentile believers...
Note then the kindness and the severity of God: severity toward those who have fallen, but God's kindness to you, provided you continue in his kindness. Otherwise you too will be cut off. [SUP]23 [/SUP]And even they, if they do not continue in their unbelief, will be grafted in, for God has the power to graft them in again. [SUP]24 [/SUP]For if you were cut from what is by nature a wild olive tree, and grafted, contrary to nature, into a cultivated olive tree, how much more will these, the natural branches, be grafted back into their own olive tree.