The move prompted Palestinian President Mahmoud Abbas to halt ties with the Trump administration, declaring it unfit to remain in its role as the sole mediator in peace talks.
Netanyahu on Sunday praised Trump's "bold decision" in upending decades of US policy by relocating the embassy from Tel Aviv and recognizing Jerusalem as Israel's capital.
Police said over 30,000 people took part in Sunday's festivities.
The agenda will include talks over the controversial USA embassy move, scheduled to take place on Monday.
In April, Saudi Crown Prince Mohammed bin Salman told Israeli journalist Barak Ravid: "In the last several decades, the Palestinian leadership has missed one opportunity after the other and rejected all the peace proposals it was given".
President Donald Trump's daughter and son-in-law Ivanka Trump and Jared Kushner, are leading the trip which includes Treasury Secretary Steve Mnunchin and President Trump's middle east envoy Jason Dov Greenblatt.
In an area east of Gaza City, protesters burned tires, releasing large plumes of black smoke, and threw stones.
"Palestinians must continue protesting peacefully to show the entire world and the Israeli occupation how civilized they are and that they will not concede their legitimate rights".
Stories of faith, kindness and determination emerge during Karnataka polls
The BJP, meanwhile, has proposed that it might be open to offering Kumaraswamy the first go at the chief ministerial chair. Almost 70 per cent of the 49.6 million electorate in Karnataka voted on Saturday to elect a new Assembly.
The Israeli army said on Sunday that it held Hamas accountable for anything in the Gaza Strip "and its consequences". The Mufti also called for commemorating the 70th anniversary of the Nakba. In 1980, Israel effectively annexed East Jerusalem and declared the entire city as its capital.
Both the embassy move and the protests have symbolic timing.
Palestinians consider the eastern part of the city as their capital.
But Netanyahu insisted the embassy move is "the right thing to do" and ordered other countries to follow suit.
An extra two brigades are being deployed to the Gaza Strip and another in the West Bank.
The government of Jordan, the custodian of the site, sent a letter of protest to the Israeli foreign ministry condemning this as a "provocation by extremists", a spokesman said.
A Palestinian teen shot by Israeli forces in Gaza border clashes succumbed to his wounds Saturday, the health ministry in the enclave said.
"It was really just us, it was our family that was there", she said.
"At this time 70 years ago, the new state of Israel was forcibly expelling hundreds of thousands of Palestinians from their homes in what is now Israel". "The United States has no greater partner than Israel", he said.
Various countries once had embassies based in Jerusalem but many moved after a 1980 law saw the country explicitly claim the city's east, despite United Nations objections.