Trump's decision sparked violent protests across the Arab world, mass confrontations between Israeli police and Palestinians deeply aggrieved by the move, and condemnation and disapproval from many international leaders.
Putin said that the move could, "in fact, ruin the prospects for the Palestine-Israel peace process," adding that Russia hoped that the "specific terms of the agreement on Jerusalem's status are the subject of direct talks between Palestine and Israel."
But as the U.S. makes itself look partisan with regards to complex and fraught Israeli and Palestinian relations, Russia has a good relationship with the Arab world, most notably being an ally of arch rivals Saudi Arabia and Iran, and has already taken a key role in brokering a peace process in Syria.
Granville said that while Russia was in a good position to deal with all parties involved, it might not want the difficult role of peacemaker, or "honest broker," in peace talks.
"Russia is better placed to deal with everyone — although the role of an 'honest broker' in the peace process is an invidious and somewhat doomed role," he said.
Russia has cordial relations with Israel with the countries enjoying solid political and cultural ties. As a key player in Syria's reestablishment after a prolonged civil war, Russia has also accommodated Israel's requests for a new buffer zone along its border with Syria that Iranian soldiers would not be allowed to enter — thus helping Syrian President Bashar al-Assad, an ally of Moscow.
With complex relations at play and at stake, one Russia analyst believed that the country would rather not get involved in messy Israeli-Palestine politics, despite the opportunity the U.S.' controversial action had presented.
"To some extent, anything that's damaging U.S. relations with the Arab world gives someone else the opportunity to slip in, but Putin is a fan of Israel," Jason Bush, Eurasia Group's senior analyst specializing in Russia, told CNBC on Wednesday.
"He's done a lot to improve relations. They have a lot in common, such as a commitment to combating Islamic extremism. But Russia doesn't want to take sides in the Middle East, it sees itself as friendly towards both Israel and the Arab nations around it."