Among those who are in the country for the occasion are Donald Trump’s daughter Ivanka and her husband Jared Kushner, both of whom serve as advisers to the US President.
The pair will attend an official opening ceremony of the embassy on Monday, while most European Union ambassadors are expected to boycott the event.
US Treasury Secretary Steven Mnuchin, who is among the US delegation, described the embassy’s move as “a sign of the enduring friendship and partnership between our two countries”.
Mr Trump announced the move last year, officially recognising Jerusalem as Israel’s capital, a decision that was not welcomed in many other parts of the world.
But Israel’s Prime Minister Benjamin Netanyahu said on Sunday that other countries should follow the US lead “because it’s the right thing to do”.
He added: “Move your embassies to Jerusalem because it advances peace, and that’s because you can’t base peace on a foundation of lies.”
I am honored to join the delegation representing @POTUS, his Admin & the American people at this momentous ceremony commemorating the opening of our new US Embassy in Jerusalem, Israel. We will pray for the boundless potential of the US-Israel alliance & we will pray for peace. pic.twitter.com/ulYbJAfTcL
— Ivanka Trump (@IvankaTrump) May 12, 2018
Jerusalem is of massive importance to Israelis and Palestinians, being a city sacred to Jews, Christians and Muslims.
Israelis see the city as their “eternal and undivided” capital, with Mr Netanyahu saying that “under any peace agreement you could possibly imagine, Jerusalem will remain Israel’s capital”.
Palestinians, however, see East Jerusalem as the capital of their future state.
The general delegation of the Palestine Liberation Organisation to the United States said the US Embassy’s move “gives life to a religious conflict instead of a dignified peace”.
They added: “Tragically, the US administration has chosen to side with Israel’s exclusivist claims over a city that has for centuries been sacred to all faiths.”
Previous US administrations had put on hold any decision on the Embassy’s location, pending progress in the peace talks, which have been on hold since 2014.
Most other countries say moving their embassies would prejudge any possible peace deal between the two sides and they showed their disapproval on Sunday by their absence.
Israel said all 86 countries with diplomatic missions in the country were invited to the event, and 33 confirmed they would attend.
Representatives from Hungary, Romania and the Czech Republic are among those present but there are no envoys from western European states.
The EU mission in Israel said on Friday that the bloc would “respect the international consensus on Jerusalem… including on the location of their diplomatic representations until the final status of Jerusalem is resolved”.
The embassy event comes as more than 30,000 people celebrated Jerusalem Day, the 51st anniversary of Israel’s capture of the eastern sector of the city from Jordan in the 1967 Middle East war.
Meanwhile, there have been months of protests by Palestinians in Gaza.
Since late March, 42 Palestinians have been killed by Israeli army fire and more than 1,700 others injured.
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It is thought that protesters could try to enter Israel this week because of the embassy move.
Israel has defended its actions, saying it is protecting its sovereign border and nearby communities.