Just off the main road through West Jerusalem toward Bethlehem sits a prime but barren piece of real estate surrounded by luxury flats.

It's the site of a future American embassy to Israel that, for nearly two decades, the US Congress has demanded be built immediately. But once American presidents begin navigating the minefield of the Israeli-Palestinian conflict, they quickly realise they don't need to add to their problems by shifting the US embassy from Tel Aviv - a unilateral statement on the status of Jerusalem.

Just how sensitive the issue of Jerusalem is was laid bare at the Democratic National Convention on Wednesday when, fearing accusations of not being pro-Israel enough, the party leadership hurriedly revived a clause in the platform from previous years proclaiming the city as the Jewish state's capital when much of the rest of the world withholds recognition. The DNC also said Jerusalem should be an "undivided city", while contradicting itself by adding that the issue is subject to negotiation with the Palestinians, who claim occupied East Jerusalem as their own capital.

That's exactly what the Democratic party platform said when Barack Obama was elected in 2008. But as president, he has not done any more than his predecessors to act on the vexed issue of the embassy.

It's a reflection of the split US stance toward Israel that Congress and political parties are given to highly partisan declarations of support for the Jewish state, driven by domestic politics and a powerful lobby, while presidents are forced to maintain the pretence of neutral arbiter in the diplomatic machinations that have failed to deliver an end to occupation and a free Palestinian state.

At the heart of the fuss at the DNC is Israel's demand that the world recognise all of Jerusalem as its capital.

Although it's evident that functionally the city is the Jewish state's capital, even close allies such as Britain say that to give formal recognition would be to legitimise the Israeli occupation of East Jerusalem when talks with Palestinians are meant to decide its status, even if an agreement looks a distant prospect. So most countries, including the US, keep their embassies in Tel Aviv and generally speak about Jerusalem as the seat of the Israeli government.

But the US Congress has taken a contrary position – in its enthusiasm to be as pro-Israel as possible. In 1995, the Republican-led Congress passed a law requiring the US embassy to be moved to Jerusalem by 1999. President Bill Clinton declined to do so as he attempted to shepherd Yasser Arafat and various Israeli leaders toward a deal. George W Bush attacked Clinton for it.

"As soon as I take office I will begin the process of moving the US ambassador to the city Israel has chosen as its capital," he told the pro-Israel lobby in 2000.

The Republican party election platform made an explicit commitment to move the embassy. But once Bush was in the White House, he, too, failed to make the move.

In 2008, as Barack Obama ran for president, the Democratic party platform said:

"Jerusalem is and will remain the capital of Israel. The parties have agreed that Jerusalem is a matter for final status negotiations. It should remain an undivided city accessible to people of all faiths."

The then presidential candidate said he recognised Jerusalem as Israel's capital. But, like his predecessors, Obama has declined to act on the 1995 law in the face of other Middle Eastern realities, not least the repercussions in a changing Arab world.

In July, the White House spokesman, Jay Carney, would not be drawn on what the capital of Israel is. The US state department has for years fought lawsuits over its refusal to enter "Jerusalem, Israel" as a place of birth on American passports, even though Congress has passed a law saying it must.

Sane diplomatic positions pertain while the future of the city remains unresolved. But now, it's election season – and what matters is the loyalty test.

It's not clear how the routine commitment to an undivided Jerusalem as the Israeli capital got dropped from this year's Democratic party platform, but Obama was worried enough, not least about votes in knife-edge Florida which has a significant Jewish electorate, to intervene and get it reinstated.

Mitt Romney – playing not only to part of the Jewish vote (which will mostly go to Obama), but as much to a larger Christian fundamentalist constituency solid in its support of Israel – quickly sought to capitalise on the debacle by again suggesting Obama is not truly committed. It's not the first time Romney has played the Jerusalem card. In June, he told CNN he would like to move the US embassy to the city. But the Republican presidential contender tried to give himself an out by saying that he "would only want to do so and to select the timing in accordance with the government of Israel". Well, Israel would like it to happen yesterday.

If Romney is elected, he's not likely to shift from the position of his three predecessors, which is that it's not in the US's interest to move its embassy to Jerusalem any time soon. Which leaves congressional declarations, party commitments and the fleeting controversy over the Democratic platform as nothing more than noise – which is all about US politics, not Middle East peace.

What that really highlights is the lack of any real discussion in this election of what needs to be done to reach an agreement on Jerusalem and bring about a Palestinian state.