Israeli Prime Minister Benjamin Netanyahu defended his military's show of force and thanked President Donald Trump for keeping his promise to move the U.S. Embassy.
Hundreds of police officers were deployed around the embassy compound and throughout the city, and many streets were closed down to secure the event.
Palestinian officials said that, as well as those killed, about 2,700 people were injured in Monday's violence - which they condemned as a massacre.
Israeli troops fired live ammunition, gunning down dozens of Palestinian protesters.
The US on Monday blocked a Kuwait-drafted UN Security Council statement that would have expressed "outrage and sorrow at the killing of Palestinian civilians" and called for an independent investigation, UN diplomats said.
The opening of the U.S. embassy coincided with the 70th anniversary of Israel's founding. "He is among dozens who died for the sake of Palestine and Jerusalem". May defended Israel's right to defend itself, but also called for greater restraint to be exercised.
"The expulsion of the Israeli mission must form part of the first move towards an worldwide isolation of Israel by the whole world".
According to the Gaza Health Ministry, 55 Palestinians - including six children - were killed by Israeli forces during mass protests.
Tuesday's delayed demonstrations could grow since May 15 is the annual observation of Naqba Day, or Catastrophe Day, which mourns Israel gaining statehood and the displacement of the Palestinians.
In the wake of the deaths, South Africa recalled its ambassador to Israel for consultations.
"Most of the martyrs who are killed are just normal citizens - we are not following Hamas party or Fatah party, [the two Palestinian factions]".
"We are here today to call on our elected officials to condemn Israel's attacks on Gaza", protester Tali Ruskin said.
Sen. Mike Lee of Utah was in Jerusalem on Monday as the United States officially moved its embassy there from Tel Aviv, a controversial shift sparking riots that have already killed more than 40 people.
Israel regards all of the city, including the eastern sector it captured in the 1967 Middle East war and annexed in a move that is not recognized internationally, as its "eternal and indivisible capital".
Along the Gaza border, crowds built throughout the day in the Palestinian enclave less than 100 km away from Jerusalem and sealed off from Israel by a blockade.
Israel occupied the West Bank and east Jerusalem in 1967 and later annexed east Jerusalem in a move never recognised by the global community.
"The Palestinian people are looking to the United Nations and the Security Council to activate what this organization has taken upon itself in order to achieve the maintenance of worldwide peace and security", said Kuwaiti Ambassador Mansour Al-Otaibi.