As a result, he will also move the American Embassy from Tel Aviv to Jerusalem over the course of the next three to four years. It also triggered denunciations from around the world, even from close allies like France, that suggested he had needlessly stirred more conflict in an already volatile region.
Four days of street protests in the Palestinian territories over Trump's announcement on Wednesday have largely died down, but his overturning of long-standing USA policy on Jerusalem - a city holy to Jews, Muslims and Christians - drew more Arab warnings of potential damage to prospects for Middle East peace.
Before the anticipated protest, the security forces have blocked all roads leading to the embassy and tightened security measures in surrounding areas on Sunday morning.
Most countries consider East Jerusalem, which Israel annexed after capturing it in a 1967 war, to be occupied territory and say the status of the city should be decided at future Israeli-Palestinian talks.
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A group of demonstrators set alight an effigy of the USA president, whose decision has up-ended decades of American diplomacy and an global consensus to leave the status of Jerusalem to be resolved in negotiations.
An worldwide consensus has long held that Jerusalem's final status should be determined through negotiations.
The US policy change on Jerusalem puts it "on the side of occupation" and "exempts it from a mediation role in the peace process", the Arab League said in a statement.
In Jakarta, Indonesia, that thousands of protesters gathered outside the U.S. Embassy with signs reading "Pray for Palestine" and "Freedom for Palestinians".
In Beirut, Lebanese security forces fired tear gas and water cannons at protesters, some of them waving Palestinian flags, near the U.S. Embassy. "It is impossible to implement this decision as long as there are people like us", said a Palestinian protester.
Late on Saturday Arab foreign ministers meeting in Cairo urged the United States to abandon its decision and said the move would spur violence throughout the region.