David Friedman is strongly critical of the long-held US goal of a two-state solution to the Israeli-Palestinian conflict.
The 57-year-old lawyer also supports Jewish settlement building in the occupied West Bank, which the Obama administration considers an “obstacle to peace”.
A liberal Jewish group opposed David Friedman’s nomination. Conservatives welcomed it.
David Friedman said he looked forward to working “from the US Embassy in Israel’s eternal capital, Jerusalem”, a statement that will anger Palestinians.
The UN does not recognize Jerusalem as Israel’s capital, and the US embassy has been located in Tel Aviv for decades.
However, Donald Trump had promised during the presidential campaign to move it to Jerusalem, one of several overtures he made to Israel.
The status of Jerusalem is one of the most contentious issues between Israel and the Palestinians.
Israel occupied the West Bank and East Jerusalem in the 1967 Middle East war and considers the entire city its indivisible capital; Palestinians want East Jerusalem as the capital of a future Palestinian state.
David Friedman advised the president-elect on US-Israel issues during the election campaign.
He has made clear his support for Jewish settlements in the West Bank, which he refers to using the biblical names of Judea and Samaria, and East Jerusalem.
About 570,000 Israelis live in more than 130 settlements built in these areas since 1967.
The settlements are considered illegal under international law, though Israel disputes this.
J Street, a liberal pro-Israel group based in Washington, said it was “vehemently” opposed to the nomination of David Friedman, explaining: “As someone who has been a leading American friend of the settlement movement, who lacks any diplomatic or policy credentials and who has attacked liberal Jews who support two states as <<worse than kapos>>, Friedman should be beyond the pale for senators considering who should represent the United States in Israel.”
Kapos were Jewish prisoners in Nazi camps in World War II who the SS put in charge of other inmates. They have been viewed by some as complicit in the brutal treatment of other prisoners.
Conservative pro-Israel group The Zionist Organization for America welcomed the nomination, saying David Friedman had “the potential to be the greatest US ambassador to Israel ever”.
In the same time, Israeli PM Benjamin Netanyahu, who has not enjoyed warm relations with President Barack Obama, has welcomed Donald Trump’s election.
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