According to a recent report by Channel 12, the US recently submitted a request to Israeli authorities to “begin preparing” the Allenby compound in Jerusalem for the construction of its permanent embassy.
A related media report quoted an US embassy spokesperson as saying the decision-making process is "just beginning” and “we are looking at all sites we currently lease or own, including the Arnona property.”
The temporary embassy is currently located in Arnona, in the building on Agron street that used to serve as an American consulate
The US announced last year that it officially recognized Jerusalem as the capital of Israel and held a ceremony in May 2018 to inaugurate the temporary embassy site.