Palestinian president Mahmud Abbas has said such a move would have consequences as it was a "red line" whose crossing would ruin hopes for a two-state solution.
But regional cooperation minister Tzachi Hanegbi, of Prime Minister Benjamin Netanyahu's Likud party, said the Palestinians were powerless to stop it.
"What can they do? What can they do?," he said in a briefing to reporters in Jerusalem.
"There are not going to be any consequences."
Trump -- who takes office Friday -- has pledged to acknowledge Jerusalem as the capital of Israel and relocate the US embassy there from Tel Aviv.
They demand Israeli-annexed east Jerusalem as the capital of their future state, while Israel proclaims the entire city as its capital.
The United States and most UN member states do not recognise Jerusalem as capital of the Jewish state, and the city's status is one of the thorniest issues of the decades-long Israeli-Palestinian conflict.
Yesterday French Foreign Minister Jean-Marc Ayrault warned the move would have "extremely serious consequences."
Among the threats Abbas has made is that his government could reverse its recognition of Israel, but Hanegbi said that would be suicidal.
"This is not a threat. This is shooting themselves in the head," Hanegbi said in English.
"I don't think Abu Mazen has an interest to open an intifada, I don't think the Palestinians would like another intifada," he added, referring to Abbas by his Arabic nickname.
He said he did not expect a "domino effect," and that most other countries would keep their embassies in Tel Aviv.
"It is a decision reflecting the special relationship between Israel and the United States. It is not going to be a domino effect.
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