Turkish President Recep Tayyip Erdogan, who has repeatedly warned of the consequences of Trump's move, also lashed out by calling Israel a "terrorist state" that "kills children".
Israeli Prime Minister Benjamin Netanyahu, speaking at a press conference with French President Emmanuel Macron in Paris, hit back, calling Erdogan a leader who "bombs Kurdish villagers" and "helps terrorists".
Trump's announcement on Wednesday has been followed by days of protests and clashes in the Palestinian territories. Four Palestinians were killed either in clashes or by Israeli air strikes in retaliation for rockets fired from the Gaza Strip.
On Sunday, a Palestinian stabbed an Israeli security guard at Jerusalem's central bus station, leaving him in a serious condition. The Palestinian was arrested.
Tens of thousands have also protested in Muslim and Arab countries, including Jordan, Turkey, Pakistan and Malaysia.
Further protests were held in countries including Lebanon, Indonesia, Egypt and Morocco as well as the Palestinian territories on Sunday.
Lebanese security forces fired tear gas and water cannons at several hundred demonstrators near the American embassy.
Tens of thousands rallied in Morocco's capital Rabat, many waving Palestinian flags.
Protests in Cairo, Jakarta
In Jakarta, some 5,000 Indonesians protested in solidarity with the Palestinians, gathering outside the US embassy in the world's most-populous Muslim country.
Students and professors in Cairo demonstrated at the prestigious Al-Azhar University, a university spokesman said, with pictures on social media showing several hundred protesters. Dozens of students protested at two other Cairo universities.
Palestinian protests on Sunday were smaller than in previous days.
Protests and clashes broke out in Al-Arroub refugee camp in the south of the occupied West Bank, leaving one Palestinian wounded by rubber bullets, the Palestinian health ministry said.
A few dozen Palestinians in Bethlehem, also in the West Bank, burned tyres and threw stones at Israeli soldiers, who fired tear gas.
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Separately, the Israeli military said it destroyed a Hamas tunnel stretching from the Gaza Strip into Israeli territory - an incident unrelated to the recent unrest, but which threatened to further increase tensions.
Such tunnels have been used in the past to carry out attacks.
Trump's declaration has been followed by near universal condemnation and diplomatic fallout, with warnings it risks setting off a new round of violence in the turbulent Middle East.
US Vice President Mike Pence is due to visit the region later this month, but Palestinian officials say president Mahmud Abbas will refuse to meet him.
Arab League foreign ministers on Saturday called on Washington to rescind the decision.
Despite the outrage, Trump's UN Ambassador Nikki Haley insisted Sunday that the Jerusalem declaration would "move the ball forward" on peace efforts.
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Netanyahu heads to Europe
Netanyahu's Europe trip was long planned, but came after both Macron and EU diplomatic chief Federica Mogherini criticised Trump's decision.
There have also been ongoing tensions between Netanyahu and EU officials over Israeli settlement building in the West Bank.
Macron called on the Israeli leader to freeze settlement building during their talks Sunday and to show "courage" to help restart peace efforts.
Speaking at their press conference, Netanyahu again lauded Trump's Jerusalem recognition and called the White House's bid to restart peace efforts with the Palestinians a "serious effort".
He welcomed Macron's condemnation of attacks against Israel after on Saturday criticising European "hypocrisy" over condemnation of Trump's declaration, saying rockets from Gaza should also be criticised.
Netanyahu was to travel to Brussels for talks with EU foreign ministers on Monday in what would be the first of their kind with an Israeli premier in 22 years.
Trump's decision upended decades of US diplomacy and broke with international consensus.
It drew criticism from every other UN Security Council member at an emergency meeting on Friday.
Clashes in the West Bank and along the fence dividing the Gaza Strip from Israel have seen Palestinians burning tyres while hurling stones and firebombs at Israeli troops, who responded with tear gas, rubber bullets and live rounds.
Retaliatory Israeli air strikes on Gaza in response to rockets killed two Hamas militants on Saturday while two other Palestinians died in clashes near the border fence the day before.
Israeli Prime Minister Benjamin Netanyahu's first meeting in Europe was with French President Emmanuel Macron where they discussed US' Jerusalem decision. Source: AAP
US isolated
Palestinian health officials say more than 1,100 people were wounded by tear gas, rubber bullets, live fire and other means between Thursday and Saturday.
There have been fears of a much larger escalation of violence after Hamas leader Ismail Haniya called for a new Palestinian intifada, or uprising.
In Rome, Pope Francis called Sunday for "wisdom and prudence", asking world leaders "to avert a new spiral of violence".
Trump said his defiant move -- making good on a 2016 presidential campaign pledge -- marked the start of a "new approach" to solving the Israeli-Palestinian conflict.
But Washington has found itself isolated on the global stage.
Five European countries on the Security Council insisted the new US policy was inconsistent with past resolutions.
The decision was further complicating domestic Palestinian politics, particularly between Abbas's Fatah and the Islamist Hamas, now at a key stage in a fragile reconciliation process after a decade of bitter enmity.
Hamas, which violently seized Gaza from Fatah in 2007, was due to formally hand back power to the Palestinian Authority on Sunday, but Fatah's chief negotiator said "obstacles" remained.
Protesters take to the streets in Pakistan against the US President Trump's decision to accept Jersulalem as Israel's capital. Source: AAP
