At least 43 Palestinians have been killed and 2,200 wounded by Israeli troops, Palestinian officials say, on the deadliest day of violence since the 2014 Gaza war.
The violence came as the US opened its embassy in Jerusalem, a move that has infuriated Palestinians.
They see it as clear US backing for Israeli rule over the whole city, whose eastern part Palestinians lay claim to.
But US President Donald Trump hailed the move in a video message.
He told the dedication ceremony that it had been a “long time coming”, adding: “Israel is a sovereign nation with the right to determine its own capital but for many years we failed to acknowledge the obvious.”
The opening ceremony was brought forward to coincide with the state of Israel’s 70th anniversary.
Mr. Trump’s daughter, Ivanka, and her husband Jared Kushner, who are both senior White House advisers, joined US Treasury Secretary Steven Mnuchin and Deputy Secretary of State John Sullivan for the ceremony.
After Ivanka Trump had unveiled the seal of the embassy, Mr. Kushner said in his address: “When President Trump makes a promise he keeps it… We have shown the world that the US can be trusted. We stand with our friends and allies.”
Mr. Kushner also referred to Mr. Trump’s withdrawal from the “dangerous, flawed and one-sided Iran deal”, drawing applause from the guests.
Israeli Prime Minister Benjamin Netanyahu said: “What a glorious day. Remember this moment. This is history. President Trump, by recognising history, you have made history. All of us are deeply grateful.”
A spokesman for Palestinian Authority President Mahmoud Abbas said on Monday: “With this step, the US administration has cancelled its role in the peace process and has insulted the world, the Palestinian people and the Arab and the Islamic nation and it has created incitement and instability.”
Arab League chief Ahmed Abul Gheit said it was “shameful to see countries participating with the US and Israel in celebrating the former’s embassy move to occupied Jerusalem in a clear and grave violation of international law”.
With agency report