The decision disregarded normal procedures and will add to Palestinian fury and worldwide concern over the diplomatic relocation from Tel Aviv.
Breaking with decades of U.S. policy, President Donald Trump in December officially recognised Jerusalem as Israel's capital and pledged to move the embassy from Tel Aviv.
There had been speculation that Trump would travel to Israel to participate in the opening of the embassy, scheduled for May 14 to mark Israel's 70th anniversary. The third phase, the site selection and construction of a new embassy, will take up to nine years.
No country now has its embassy in Jerusalem, instead keeping them in the Israeli commercial capital Tel Aviv.
The new embassy is to be housed initially in a U.S. consular building in Jerusalem while Washington searches for a permanent location.
"I am looking at coming, and if I can, I will", Trump said.
In December previous year Trump overturned decades-long U.S. policy by recognizing Israel's claim to Jerusalem as its capital and announced that the embassy would move to the holy city from Tel Aviv.
The status of Jerusalem is among the most contentious in the Israeli-Palestinian conflict.
In March a poll carried out by Haifa University sociologist Sammy Smooha has found that relations between Jewish Israelis and citizens of the Arab minority are plummeting, with each side losing faith in coexistence and becoming less tolerant of the other.