Amid growing international criticism, Saudi Arabia has now condemned president Trump's decision to recognise Jerusalem as Israel's capital city.
With this announcement, Trump has reversed decades of US policy and could have far-reaching consequences as the fate of Jerusalem is a huge issue between Israel and the Palestinians.
In a statement released by the Gulf kingdom, the Saudis have said Trump's announcement was "unjustified and irresponsible". The Saudi royal court said, "The US move represents a significant decline in efforts to push a peace process and is a violation of the historically neutral American position on Jerusalem".
Eight of the 15 nation members of the United Nations Security Council has called for an urgent meeting on the US decision by Friday as the US's view on Jerusalem's status is at odds with most of the global community.
While most seem to disagree with the US, Israeli Prime Minister, Benjamin Netanyahu, praised it as "a historic day".
According to the 1993 Israel-Palestinian peace accords, Jerusalem's final status is meant to be discussed in the latter stages of peace talks as the Palestinians claim East Jerusalem as the capital of a future state. Jerusalem contains sites sacred to the three major monotheistic faiths of Judaism, Islam and Christianity.
East Jerusalem, including the Old City, was annexed by Israel after the Six Day War in 1967 but Israeli sovereignty over Jerusalem has never been recognised internationally.
Until now all countries have maintained their embassies in Tel Aviv but Mr Trump has directed the US state department to begin preparations to move the US embassy from Tel Aviv to Jerusalem.
The US president said he had "judged this course of action to be in the best interests of the United States of America, and the pursuit of peace between Israel and the Palestinians".
"Today, I am delivering," Trump said, despite warnings of local unrest over such a move. His decision fulfils a campaign promise that his right-wing base will find appealing.
The announcement was "nothing more or less than a recognition of reality", he said. "It is also the right thing to do."
In, what some see as a contradiction, Mr Trump stated, "the US still supports a two-state solution to the longstanding Israeli-Palestinian conflict," which would if approved by both sides, basically create an independent Palestinian state existing beside Israel.
In response, Mr Netanyahu said Israel was "profoundly grateful to President Trump," tweeting: "Jerusalem has been the focus of our hopes, our dreams, our prayers for three millennia."
Palestinian President, Mahmoud Abbas, on the other hand, said that Jerusalem is the "eternal capital of the state of Palestine," and called Mr Trump's announcement "deplorable", declaring that the US could no longer be a peace broker.
Other reactions from around the globe:
Watch the video below for Palestines reaction to Trump's announcement.