"We are at the very beginning stages of even discussing this subject," White House press secretary Sean Spicer told AFP.
President Donald Trump had promised to move the embassy to Jerusalem "fairly quickly" after coming to office, prompting speculation that a decision could come as soon as Monday.
Like other major powers, the US has put its embassy in Tel Aviv.
Palestinian president Mahmud Abbas has warned that moving the embassy would deal a huge blow to hopes for Middle East peace.
Trump and Israeli Prime Minister Benjamin Netanyahu are expected to speak by phone on Sunday, White House chief of staff Reince Priebus told AFP.