Palestinian Christians lit the giant Christmas tree in the Christian Quarter of the Old City of Jerusalem on Dec. 14. The annual Christmas Bazaar, its booths filled with sweets and carved olive wood gifts, opened as usual at the Jerusalem International YMCA (designed in the 1920s by the American architect of the Empire State Building), one of the few places in this divided city where Israeli Jews and Arabs mingle socially.

But the veneer of holiday normality barely hid the tension simmering here since President Trump recognized Jerusalem as Israel’s capital early this month, making no distinction between the Jewish sector and the Arab neighborhoods Israel annexed in 1967.

So it’s worth asking what exactly was changed by the president’s announcement.

Two things haven’t changed. First, Jerusalem is, and always was, the Israeli capital. This fact has not been recognized by other nations because Israel annexed the Arab parts of the city, whose fate would have to be resolved by negotiations if peace talks ever restart.

As far as many Israelis are concerned, this whole Jerusalem affair is a yawn. At a Shabbat dinner in the coastal city of Zichron Yaacov with Israeli Jewish friends — including two grandchildren serving in the army — the consensus was that Trump made a lot of trouble for no reason.

“Why did he have to throw a stink bomb into Jerusalem?” I was asked.

The second thing that hasn’t changed is that ordinary Palestinians — and their leadership — are weary and wary of another uprising.

On Friday, I stood by the plaza at the Old City’s Damascus Gate as (mostly peaceful) worshipers poured forth after praying at the Al-Aqsa Mosque. Small clusters of youths, and a few women, challenged the Israeli police who were lined up with guns and helmets above the plaza and gave chase.

However, the Palestinian reaction to Trump so far — while rhetorically strong — has been relatively limited on the ground.

Repeatedly I heard from ordinary Palestinians in Jerusalem and Ramallah that they distrust their leaders, who are still conferring among themselves on how to react and (mostly) calling for nonviolence. Moreover, Palestinians feel they have been betrayed by Saudi Arabia and Egypt, who have strategically allied with Israel against Iran. This leaves them isolated.

This uneasy stasis could blow up if Israeli officials aren’t careful, especially if there is an incident involving holy Muslim sites.

Trump’s shift in U.S. policy boosts those in the Israeli government who want to change the physical status of Jerusalem, and ensure that the city will be excluded from any future peace negotiations.

Israel has been building new neighborhoods around Jerusalem on West Bank land annexed to the city that have almost cut it off from its West Bank hinterland. Knesset bills are pending to annex Jewish settlements on the West Bank in order to increase Jerusalem’s population and exclude Arab neighborhoods from the city.

Danny Seidemann, a noted expert on these developments, believes Trump’s decision may inspire Israeli politicians to revisit building a new housing development on a land parcel known as E1, which would rule out any prospective Palestinian state linking up with Jerusalem. He told me, “Jerusalem is more contested than ever before.”

Perhaps the most important change precipitated by Trump’s move is that it has provoked the Palestinians to (probably) exclude any U.S. role as mediator. Without Jerusalem, no peace talks can resume. This probably kills the already minuscule chance that Trump son-in-law Jared Kushner and lawyer friend Jason Greenblatt will come up with “the ultimate deal.”

As Christmas arrives, the Trump decision does nothing to move the Holy Land closer toward peace.

Trudy Rubin is a columnist and editorial board member for the Philadelphia Inquirer.