The US president confirmed his “intention” to move the embassy in a phone call with his Palestinian counterpart, the latter’s spokesman said.
The spokesman’s statement did not say whether Trump elaborated on the timing of such a move.
Turkey threatened to cut diplomatic ties with Israel should the country become the first to recognise Jerusalem as the capital of Israel.
“Mr Trump, Jerusalem is the red line of Muslims,” Turkey’s President Recep Tayyip Erdogan told a parliamentary meeting of his ruling AK Party.
“This can go as far as severing Turkey’s ties with Israel. I am warning the United States not to take such a step which will deepen the problems in the region.”
Trump had been due to take a decision on the Holy City on Monday but delayed it by several days following a string of public and private warnings from leaders around the globe.
A Palestinian official did not provide details of Tuesday’s phone conversation with Trump.
Trump was also due to speak to Israeli Prime Minister Benjamin Netanyahu and Jordan’s King Abdullah, White House spokeswoman Sarah Sanders said.
“The president has calls scheduled this morning with Prime Minister Netanyahu, King Abdullah of Jordan and Palestinian Authority President Abbas. We will have a readout on these calls later today,” Sanders said.
In his address, Erdogan warned that any move to back Israel’s claim to the city would mobilise “the entire Islamic world”.
The suggestion that Trump could be poised to reverse years of US policy over Jerusalem has prompted a furious bout of Palestinian lobbying, with Hamas, which rules Gaza, threatening to launch a new intifada.
All foreign embassies are located in Tel Aviv with consular representation in Jerusalem. Trump had been expected on Monday to decide whether to sign a legal waiver that would delay by six months plans to move the US embassy.
“No action though will be taken on the waiver today and we will declare a decision on the waiver in the coming days,” White House spokesman Hogan Gidley said on Monday.
But he insisted the move would eventually happen.
“The president has been clear on this issue from the get-go: It’s not a matter of if, it’s a matter of when.”
Another option under consideration, officials have said, is for Trump to order his aides to develop a longer-term plan for the embassy’s eventual relocation.
However it is unclear whether any public recognition by Trump of Israel’s claim on Jerusalem would be formally enshrined in a presidential action or be more of a symbolic statement.
US officials and allies express concern
Senior US officials told Reuters some officers in the State Department were also deeply concerned and the European Union, the Palestinian Authority, Saudi Arabia and the Arab League all warned any such declaration would have repercussions across the region.
A senior US official told Reuters last week that Trump was likely to make the announcement on Wednesday, though his adviser and son-in-law Jared Kushner said over the weekend no final decision had been made.
Such a decision would break with decades of US policy that Jerusalem’s status must be decided in negotiations.
Israel captured Arab East Jerusalem in the 1967 Middle East war. It later annexed it, declaring the whole of the city as its capital. The declaration is not recognised internationally and Palestinians want Jerusalem as the capital of their future state.
Israel’s Prime Minister Benjamin Netanyahu has so far declined to speculate on what Trump might say.
But Israel Katz, Israel’s minister of intelligence and transport, took to Twitter to reject Turkey’s threat and reiterate Israel’s position on the ancient city, which is one of a long list of stumbling blocks in years of failed peace talks with the Palestinians.
“We don’t take orders or accept threats from the president of Turkey,” he wrote.
“There would be no more righteous or proper an historical move now than recognising Jerusalem, the Jewish people’s capital for the past three thousand years, as the capital of the State of Israel.”
‘Playing with fire’
Two US officials said on condition of anonymity that news of the plan to recognise Jerusalem as Israel’s capital had kicked up resistance from the State Department’s Near Eastern Affairs bureau (NEA), which deals with the region.
“Senior (officials) in NEA and a number of ambassadors from the region expressed their deep concern about doing this,” said one official, saying that the concerns focused on “security”.
The State Department referred questions to the White House. The White House did not immediately respond to requests for comment.
A fourth US official said the consensus US intelligence estimate on US recognition of Jerusalem as Israel’s capital was that it would risk triggering a backlash against Israel, and also potentially against US interests in the Middle East.
US allies added their warnings.
The European Union’s top diplomat, Federica Mogherini, said on Tuesday that “any action that would undermine” peace efforts to create two separate states for the Israelis and the Palestinians “must absolutely be avoided”.
Speaking alongside US Secretary of State Rex Tillerson in Brussels, she said Jerusalem’s status would have to be agreed through negotiations.
If Mr Trump really tomorrow or the day after tomorrow comes up and says that ‘I recognise united Jerusalem to be the capital of the state of Israel’ he has destroyed every chance that he will play to get the deal of the century that he has been talking about
– Nabil Shaath, adviser to Palestinian President Mahmoud Abbas
The EU’s 28 foreign ministers will discuss the matter with Netanyahu in Brussels next Monday, to be followed by a similar meeting with Palestinian President Mahmoud Abbas early next year, she added.
Nabil Shaath, adviser to Palestinian President Mahmoud Abbas, told journalists gathered on the outskirts of Jerusalem near Bethlehem that any announcement along those lines would wreck peace efforts.
“If Mr. Trump really tomorrow or the day after tomorrow comes up and says that ‘I recognise united Jerusalem to be the capital of the state of Israel’ he has destroyed every chance that he will play to get the deal of the century that he has been talking about.”
The Arab League and Saudi Arabia repeated past warnings, following statements by France and Jordan in recent days.
The diplomats and leaders did not spell out what the consequences might be of any announcement. Past Israeli-Palestinian rifts have deteriorated into protests, attacks and fighting and further destabilised the region.
A fifth US official said concerns of Palestinian and other Arab leaders about endorsing Israel’s claim to Jerusalem were being taken into account but no final decisions had been made.
Daniel Benjamin, a former US counter-terrorism official now at Dartmouth University, had a simple message: “This is playing with fire.”