The announcement, expected this week, would fulfill a Trump campaign promise -- one made by previous presidents and then set aside because of regional concerns and Jerusalem's contested status between Israelis and Palestinians. Both sides claim the holy city as their capital.
The resistance from allies is reportedly leading to debate within the administration on how to balance the move with recognition of Palestinian claims to Jerusalem and may delay an announcement, according to sources with knowledge of the situation.
"Any announcement prior to a final settlement would have a detrimental impact on the peace process and would heighten tensions in the region," Prince Khalid bin Salman, the Kingdom of Saudi Arabia's ambassador to the US, said in a statement to CNN.
In a phone call with Trump on Monday, French President Emmanuel Macron expressed similar thoughts, according to a readout provided by the French Foreign Ministry.
The French President shared his concern about the possibility that the United States might unilaterally recognize Jerusalem as the capital of Israel, according to the statement.
Macron reaffirmed the standard international position that the status of Jerusalem should be resolved through peace negotiations between Israelis and Palestinians, "and particularly those relating to the establishment of two states, Israel and Palestine, living side by side in peace and security with Jerusalem as their capital," the statement said.
White House deputy press secretary Hogan Gidley, briefing reporters aboard Air Force One on Monday, addressed the question of whether Trump will act to move the US Embassy from Tel Aviv to Jerusalem but didn't take up the question of recognition.
"The President has been clear on this issue from the get-go that it's not a matter of if but a matter of when. No action, though, will be taken on the waiver today. And we will declare a decision on the waiver in the coming days," Gidley said.
The Jerusalem Embassy Act of 1995 requires the embassy to be moved to Jerusalem or face the financial penalty of losing half the State Department's appropriated funding for the acquisition and maintenance of buildings abroad. Every six months, however, presidents can sign a waiver to avoid these penalties on national security grounds.
The Saudi ambassador added that Saudi Arabia was working with the Trump administration on a possible Mideast peace settlement and remains committed to a solution "based on the 1967 borders including east Jerusalem as the capital of a Palestinian state. We are working with the President's peace negotiation team to achieve a fair and just settlement."