Israeli PM Benjamin Netanyahu says he expects European countries to follow the US in recognising Jerusalem as his country's capital.
He is in Brussels for talks - the first time an Israeli prime minister has visited the city in more than 20 years.
The EU wants to see Jerusalem as the capital of both Israeli and Palestinian states under a peace process.
Donald Trump's move has left the US isolated on a highly sensitive issue between Israel and the Palestinians.
But arriving in Brussels, Mr Netanyahu again welcomed the announcement, saying Jerusalem has been the capital of the Jewish people for 3,000 years and Mr Trump had put "facts squarely on the table".
"I believe that all, or most, European countries will move their embassies to Jerusalem, recognise Jerusalem as Israel's capital and engage robustly with us for security, prosperity and peace," he added.
As well as recognising Jerusalem, President Trump also said he was directing the US state department to begin preparations to move the US embassy from Tel Aviv to Jerusalem.
"You know where the European Union stands," the EU's foreign policy chief Federica Mogherini said.
"We believe that the only realistic solution to the conflict between Israel and Palestine is based on two states with Jerusalem as the capital of both."
Israel has always regarded Jerusalem as its capital, while the Palestinians claim East Jerusalem - occupied by Israel in the 1967 war - as the capital of a future Palestinian state.
Israeli sovereignty over Jerusalem has never been recognised internationally, and all countries maintain their embassies in Tel Aviv.
Jerusalem is also home to key religious sites sacred to Judaism, Islam and Christianity, especially in East Jerusalem.
Mr Trump's announcement sparked fierce protests in the Middle East which again flared on Sunday.
In the Lebanese capital Beirut police used tear gas to stop demonstrators reaching the US embassy, while in Jerusalem itself, a Palestinian was arrested after stabbing and seriously wounding an Israeli security guard.