Protesters burned Israeli and US flags or stomped on Trump posters in displays of anger.
In the West Bank, demonstrators torched heaps of tires, sending columns of thick black smoke rising over the cities of Ramallah and Bethlehem. Palestinian stone-throwers traded volleys in the streets with soldiers firing tear gas and rubber bullets.
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Three Palestinians, two of them in Gaza, were wounded by live ammunition and 12 were hit by rubber-coated steel pellets, according to Red Crescent paramedics and health officials.
Dozens more suffered from tear gas inhalation, medics said.
Trump's seismic policy shift on Jerusalem has angered Arabs and Muslims who view it as an expression of blatant pro-Israel bias on one of the region's most explosive religious and political disputes.
Jerusalem is home to major Muslim and Christian shrines, as well as Judaism's holiest site. The Israeli-annexed eastern sector, captured by Israel in 1967, is sought by the Palestinians as a future capital, while Israel says it won't relinquish any part of Jerusalem.
Palestinian political groups had called for massive demonstrations today in the West Bank, Gaza Strip and east Jerusalem -- the lands captured by Israel in 1967 and sought for a Palestinian state.
Separately, the Gaza-based leader of the Islamic militant Hamas agitated for a third uprising against Israel.
The militant al-Qaida network today urged followers around the world to target vital interests of the United States, its allies and Israel. A statement posted on al- Qaida's media arm as-Sahab called for holy war or jihad and described America as an oppressor of Muslims.
Street protests were held today across the region. Marches were staged in Iran, Indonesia, Malaysia, Pakistan and Jordan.
In the Jordanian capital of Amman, hundreds of protesters chanted "Jerusalem is Arab" and "America is the head of the snake."
Demonstrators stomped on a poster that showed Trump alongside a Nazi swastika.
Thousands of worshippers at a traditional flashpoint, Jerusalem's Old City, dispersed quietly after noon prayers. The Old City is home to the Al-Aqsa Mosque compound, which is Islam's third holiest shrine and stands on the remnants of Judaism's holiest site. One of the compound's outer walls is the holiest site where Jews can pray.
Around 2,000 people later gathered in the plaza around the mosque, chanting: "With our soul and blood, we will defend Al Aqsa and Jerusalem."
For decades, the United States had professed neutrality on the fate of Jerusalem, in line with an international consensus that the fate of the holy city should be determined in negotiations.
Trump's dramatic policy shift, announced on Wednesday, has triggered widespread international condemnation, including from US allies. Several European leaders have warned the US shift could further destabilize the region.
French President Emmanuel Macron said after a meeting with Lebanese Prime Minister Saad Hariri that he was "launching an appeal for calm and responsibility."
Hariri said the U.S. decision "will further complicate the peace process and pose an additional challenge to the stability of the whole region.
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