At least two Palestinians were killed and nearly 800 others were injured during protests on Friday, while two Palestinians were killed in an Israeli air strikes on Gaza Strip as the unrest against the US decision continued for the fourth day. Israel said it retaliated Hamas rockets attacks towards its territory.
On Saturday, at least three Palestinians were arrested when Israeli forces attempted to disperse a crowd of at least 100 peaceful protestors in East Jerusalem's Salah Eddin Street.
Among those arrested were Palestinian Legislative Council member Jihad Abu Zneid.
Israeli forces fired stun grenades, tear gas and charged through the crowd on horses, pushing and beating journalists and demonstrators at the scene.
Israeli forces closed down most shops on Salah Eddin, and confiscated Palestinian flags from protesters.
A 30-year-old Palestinian man was killed by Israeli fire during protests in Gaza on Friday, Palestinian news agency WAFA reported, citing the Palestinian health ministry.
A 54-year-old man in Gaza later died from his wounds, WAFA said.
The Red Crescent said on Friday that so far, they had attended to at least 767 injuries in the occupied West Bank, East Jerusalem and Gaza Strip.
In and around the Old City of Jerusalem, protests began after noon prayers on Friday as part of the "Day of Rage" protests.
Speaking in front of Damascus Gate in occupied East Jerusalem, Al Jazeera's Harry Fawcett said on Friday the protests have been mostly peaceful.
"Occupied East Jerusalem has been relatively peaceful in the past two days since this announcement from Trump," he said.
"Emotions are very high here, and it doesn't take much to kick things off," he added.
"The protests have largely been noisy and loud and occasionally Palestinian flags and banners [would be] unfurled at which Israeli security forces would move in and separate out some of those who they wanted to target."
Israeli forces fired tear gas and rubber bullets at demonstrators in the occupied West Bank cities of Hebron and Bethlehem, with at least one case of live ammunition being reported, Palestinian medical services said.
Friday marked the third day of protests across the occupied territories.
Palestinian universities, schools, and educational institutions had also declared a strike after a directive from the Palestinian Ministry of Education.
Trump, ignoring warnings from the international community, announced on Wednesday that the US was formally recognising Jerusalem as the capital of Israel and would begin the process of moving its embassy to the city, breaking with decades of US policy.
The decision has been condemned by world leaders who have described it as a "dangerous escalation" and the final nail in the coffin of peace negotiations between Israelis and Palestinians.
Palestinians want East Jerusalem as the capital of their future state, while Israel says the city, which is under Israeli occupation, cannot be divided.
Trump's "announcement has the potential to send us backwards to even darker times than the ones we are already living in", said Federica Mogherini, high representative of the European Union for foreign affairs.
Speaking on Friday, US Secretary of State Rex Tillerson said that the relocation of the US embassy would probably not take place for at least two years.
"This is not something that is going to happen this year or probably not next year, but the president does want us to move in a very concrete, very steadfast way," Tillerson said after talks in Paris with his French counterpart Jean-Yves Le Drian.
Saeb Erekat, the Palestinian chief negotiator, has said Palestinians will not talk to the US until Trump reverses his decision.
Speaking to Al Jazeera on Friday, Erekat said the Palestinian leadership was considering all options in response to Trump's announcement.
In a speech in Gaza City on Thursday, Hamas leader Ismail Haniya has said the US decision is a "war declaration against Palestinians", and called for a new Intifada, or uprising.
Haniya said US President Donald Trump's recognition "killed" the Israeli-Palestinian peace process.
"This decision has killed the peace process, has killed the Oslo [accord], has killed the settlement process," he said.
"The US decision is an aggression, a declaration of war on us, on the best Muslim and Christian shrines in the heart of Palestine, Jerusalem. We should work on launching an Intifada in the face of the Zionist enemy," Haniya said.
On Friday evening, at least 25 Palestinians, including six children, were wounded in Israeli air strikes on the besieged Gaza Strip, according to the Palestinian health ministry.
Friday night's air raid by Israel followed the alleged launching of rockets from inside the Gaza Strip.
There were reports that an infant died from wounds inflicted by the strikes, but the health ministry has not confirmed the death.
Additional reporting by Ibrahim Husseini in East Jerusalem