A new poll suggests the Liberals will be annihilated in a Sydney by-election as a potential foreign policy shift backfires.

A proposal to relocate Australia’s Israeli embassy to Jerusalem has divided the Jewish community in Wentworth.

At a forum overnight, some voters backed the assessment the policy is politically motivated to help the Liberals hold on to the blue-ribbon seat.

But Prime Minister Scott Morrison insists it’s a genuine idea.

A leaked internal Liberal poll suggests independent Kerryn Phelps is ahead of the Liberal Party’s Dave Sharma, with 55 per cent of the two-party preferred vote in the Sydney eastern suburbs electorate.

Malcolm Turnbull, who lost his job as prime minister in August, held Wentworth with a two-party majority of almost 18 per cent.

It would be a devastating loss for the government if Wentworth was to fall.

Mr Sharma tells Ben Fordham “it’s a very competitive race”.

“There’s 16 candidates in the field… and this isn’t a safe seat.

“It’s going to be tough for us to hold.”

He says the result will “determine the fate of the government in Canberra”.

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