The US on Monday opened its embassy in Jerusalem under a controversial move by President Donald Trump that has infuriated the Palestinians, who clashed with Israeli soldiers who shot dead at least 37 of them in Gaza, in the deadliest escalation of violence since 2014.

Trump announced the decision to move the embassy in December, when he formally recognised the city as the capital of Israel, breaking away from decades of US neutrality on the sensitive issue.

Trump, in an early morning tweet, hailed the opening of the US embassy in Jerusalem as "a great day for Israel."

Trump made no reference to the violence in an early morning tweet but said, "A great day for Israel!"

A high-level American delegation that includes Deputy Secretary of State John Sullivan, Secretary of Treasury Steven Mnuchin, Senior adviser and Trump son-in-law Jared Kushner, senior adviser and first daughter Ivanka Trump, and Special Representative for International Negotiations Jason Greenblatt are attending the embassy opening ceremony.

Israeli Prime Minister Benjamin Netanyahu was also present.

The Embassy move is contentious for Palestinians, who hope to claim part of the city as their future capital, and for many in the Arab world, as it is home to some of the holiest sites in Islam. The city is also home to deeply holy sites for Jews and Christians.

The issue has been so thorny that international negotiators had left the question of Jerusalem to the final stages of any peace deal.