Have the past week's developments changed anything in their conflict? Demands are the same and impasses remain, but the United States' role in potential peace talks appears to be shifting.
The day was marked by violence and bloodshed, as tens of thousands of Palestinians protested the embassy opening and Israeli army forces killed dozens of protesters.
The U.S. ambassador to Israel, David Friedman, praised "the vision, the courage and the moral clarity" of President Trump in making the U.S. the first country to open an embassy in the disputed city.
The move on Monday of the U.S. embassy from Tel Aviv to Jerusalem endorses Israel's view of the city — where it has reshaped the map to solidify its hold.
Israel has reshaped Jerusalem in a way that leaves many Palestinians struggling. About 38 percent of the city's residents are Palestinian. Tens of thousands live behind an Israeli-built barrier.
The relocation of the embassy has sparked celebration and outrage. Both Israelis and Palestinians claim Jerusalem as their capital. No other countries have embassies there.