The embassy will initially be located in the Arnona neighbourhood in a building that now houses consular operations of US Consulate General Jerusalem, said the State Department Spokesperson Heather Nauert in a statement on Friday, Xinhua reported.
The Trump administration is reportedly reviewing an offer to help cover the costs of the Jerusalem embassy from Casino mogul Sheldon Adelson. The embassy will be housed in a building that now contains a consular office, the State Department said. Consular operations will continue there, and USA ambassador to Israel, David Friedman, will work there with a small staff.
Last month, senior officials told The New York Times the move could happen as soon as 2019, despite the administration originally planning not to rush the transition. Four U.S. officials told The Associated Press that State Department lawyers are researching whether accepting such a deal would be legal.
Palestinians will see Trump's announcement as the end of their hopes and demands for East Jerusalem as a capital of a future independent state.
Both Israelis and Palestinians consider Jerusalem to be their capital city.
Moving the U.S. embassy in Israel from Tel Aviv to Jerusalem on May 14 is not only a violation of worldwide law, but also provocative to the feelings of the Palestinian and Arab people, said Saeb Erekat, Secretary General of the Executive Committee of the Palestine Liberation Organization (PLO).
The Palestine Liberation Organization (PLO) denounced the decision, calling it a "provocation to all Arabs". Hundreds of thousands of Arabs fled as villages were emptied of their residents or destroyed in areas that later became Israel.
Both Israel and the Palestinians claim Jerusalem as their historic capital. Israel has annexed East Jerusalem and declared the entire city as its capital, a move not recognized by the worldwide community.
"What is important here is that without the approval of the Palestinians and specifically President Abbas, there is not going to be anything happening here". The move broke with decades of U.S. foreign policy and inflamed tensions between the U.S., Israel and Palestinians.
Aaron David Miller, a former USA peace mediator for Israeli-Palestinian talks, called the Jerusalem move "a real cosmic Oy Vey" moment.
The relocation date announced on February 23 is sooner than had originally been suggested by US officials.