Jerusalem, Israel. Period.

Nathan Diament writes that it would be practically impossible to divide Jerusalem between an Israeli west and Palestinian east. His argument isn't easily summarized. Its nub is that the Muslim claim on the Old City (which would also be divided between east and west) is actually weak -- though one may quibble over his use of the phrase "national capital" instead of spiritual capital, since Jews lost all sovereignty over Jerusalem between A.D. 70 and 1948:

The search for a "split the difference" compromise...ignores the fact that the Old City of Jerusalem has been the national capital of the Jewish people for the past 3000 years and is Judaism's holiest site, while it is Mecca that plays that role for Muslims. The international community would never expect the Islamic world to cede sovereignty over Mecca; the Jewish people ought to be accorded no less respect with regard to the Old City of Jerusalem.