Chanting slogans including "Jerusalem is ours and will remain so!" and "down with America, down with Israel", the protesters marched after prayers at the Ottoman Fatih mosque in the centre of Istanbul, an AFP correspondent said.
Other protests were planned elsewhere in Istanbul and across Turkey today.
"We consider Jerusalem as the bastion of the Muslim community ... We are here to show our unity and our strength. Nobody can deter us," said protester Doguhan, 17.
"What Trump says is empty words and means nothing to us. Whenever we see the name of Israel on a map, we cross it out and write Palestine," she added.
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Turkey's President Recep Tayyip Erdogan has taken a strong line against the move and called an emergency summit meeting of the Organisation of Islamic Cooperation (OIC) on December 13 in Istanbul.
Last year, Turkey and Israel ended a rift triggered by Israel's storming in 2010 of a Gaza-bound ship that left 10 Turkish activists dead and led to a downgrading of diplomatic ties.