Israel's prime minister Benjamin Netanyahu, has urged other countries to follow the US in recognising Jerusalem as its capital.
President Trump, who promised the move in his election campaign, says the recognition is "long overdue", even though Palestinians also claim it.
But it has been widely criticised - Islamist group Hamas says the decision will "open the gates of hell"
Palestinian legislator Hanan Ashwari says it is a huge mistake.
He said: "In one move, President Trump has succeeded in siding with the occupier and joining and encouraging Isreali lawlessness and destroying the chances of peace, provoking a religious war."