Yesterday's announcement by Washington to move the embassy from Tel Aviv to the disputed city follows US President Donald Trump's recognition of Jerusalem as Israel's capital in December.
"This decision shows the US administration's insistence on damaging the grounds for peace by trampling over international law, resolutions of United Nations Security Council on Jerusalem," the Turkish foreign ministry said in a statement.
"Turkey will continue its effort to protect the legitimate rights of the Palestinian public... against this extremely worrying decision by the US," the ministry added.
Turkish President Recep Tayyip Erdogan led Islamic condemnation of the ruling in December and called an Organisation of Islamic Cooperation (OIC) summit of the leaders of Muslim nations in Istanbul shortly after Trump's announcement last year.
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The leaders urged the world to recognise East Jerusalem as the Palestinian capital.
East Jerusalem was annexed by Israel after it seized control of the area in the 1967 war, but the move has never been recognised by the international community.
The Palestinian leadership on Friday said the US move, a year earlier than originally expected, was "a provocation to Arabs".
The founding of Israel on May 14 1948 is mourned by Palestinians as the Nakba, or "catastrophe" when an estimated 750,000 Palestinians either fled or were expelled from their homes in the war surrounding Israel's creation.
Relations between Turkey and the US have already been strained over multiple issues including Ankara's latest offensive in Syria against a US-backed Kurdish militia.