US President Donald Trump, who did not attend the opening of the new embassy, recorded a video message congratulating its opening.
"Today, Jerusalem is the seat of Israel's government. It is the home of the Israeli legislature and the Israeli supreme court and Israel's prime minister and president. Israel is a sovereign nation with the right like every other sovereign nation to determine its own capital, yet for many years, we failed to acknowledge the obvious, the plain reality that Israel's capital is Jerusalem. As I said in December, our greatest hope is for peace. This was long coming," Trump was quoted by CNN as saying.
In a series of tweets, the US President called it an "a great day for Israel" and a "big day for Israel."
US Treasury Secretary Steve Mnuchin formally began the ceremony by unveiling a US seal, officially marking the shifting of the US embassy from Tel Aviv to Jerusalem. The moment was watched by Trump's daughter and son-in-law, Ivanka Trump and her husband Jared Kushner.
In his opening remarks, Kushner called for achieving unity and peace.
"We believe, it is possible for both sides to gain more than they give so that all people can live in peace safe from danger, free from fear, and able to pursue their dreams. Jerusalem must remain a city that brings people of all faiths together."
He also praised Trump's decision of withdrawing the "dangerous" Iran nuclear deal by saying, "Last week, President Trump acknowledged another truth and kept another promise. He announced his intention to exit the dangerous, flawed and one-sided Iran deal."
Israeli Prime Minister Benjamin Netanyahu thanked Trump for his support on Twitter hours ahead of the opening ceremony.
Speaking at the ceremony, Netanyahu hailed the alliance between Washington D.C. and Jerusalem as "stronger than ever."
"What a glorious day, remember this moment. This is history. President Trump by recognizing history, you have made history. All of us are deeply moved, all of us are deeply grateful," Netanyahu stressed.
Right after the opening of the ceremony, US Secretary of State Mike Pompeo said in a statement, that the US was committed to ensuring peace and stability between Israel and Palestine. He, however, did not utter a word on the ongoing violent protests in Gaza.
On a related, the death toll in the protests went up from 41 to 52, according to the Palestinian Ministry of Health. This is the biggest number of fatalities suffered in one day since the latest round of demonstrations began in March.
The health ministry further said that over 500 others suffered injuries as the Israeli army dropped leaflets over Gaza, warning the protesters to not go near the border fence which separates Gaza Strip from Israel.
According to Palestinian protesters, they have asserted that they want to return to their ancestors' homes in Israel when they were displaced during the war between Israel and Palestine in 1948. However, Israel claims that the demonstrations are orchestrated by the Hamas, the militant group that runs Gaza Strip.
Following Trump's decision to recognise Jerusalem as the capital of Israel on December 6 last year, it stalled the US-led peace process, causing outrage in the Arab world with Palestinian leaders rejecting Washington D.C's involvement in brokering a resolution to the age-old Israeli-Palestinian conflict.
The State of Palestine seeks all of the West Bank, East Jerusalem and Gaza territories for an independent state.
Jerusalem is considered a sacred place, which is home to Jewish, Christian and Muslim holy sites. However, it is also a disputed territory, contested by both Israel and Palestine, which sees it as a capital of its future state.
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