The US will open its embassy in Jerusalem "before the end of next year", US Vice President Mike Pence said on Monday in the Israeli Parliament, where he reiterated the city was "the capital of the state of Israel".

Pence's statement follows President Donald Trump's recognition of Jerusalem as Israel's capital last month, a move that overturned decades of American policy and international consensus on the status of the holy city, the New York Times reported.

Both Israelis and Palestinians consider Jerusalem as their capital.

At the Parliament, Pence appreciated Trump and said that "the alliance between our two countries has never been stronger and the friendship between our peoples has never been deeper -- and I am here to convey a simple message from the hearts of the American people. America stands with Israel".

Arab-Israeli lawmakers had said earlier that they would boycott the Parliament speech.

Pence was earlier given a warm welcome to the office of Prime Minister Benjamin Netanyahu, greeted by an honour guard as the US national anthem played.

The welcoming ceremony in Jerusalem was attended by the White House Middle East envoy Jason Greenblatt, US Ambassador to Israel David Friedman, and the Israeli Ambassador to Washington, Ron Dermer.

Pence said that Trump's December 6 announcement "would create an opportunity to move on in good-faith negotiations between Israel and the Palestinian Authority".

Netanyahu called Trump's Jerusalem decision "historic" and thanked Pence for his part in the embassy's move. The decision led to widespread protests in which 30 Palestinians were killed by Israeli security forces. 

"I've had the privilege over the years of standing here with hundreds of world leaders and welcome them, all of them, to Israel's capital, Jerusalem," said Netanyahu. 

"This is the first time that I'm standing when both leaders can say those three words: 'Israel's capital, Jerusalem'," he said. 

Trump had said that the embassy's move should not hamper peace talks and also threatened to shutter an office of the Palestine Liberation Organisation in Washington as well as cut American donations to the UN agency that provides services for Palestinian refugees.

In a statement on her Facebook page, Israel's Culture Minister, Miri Regev, called Pence "a very welcome guest here" and thanked him and Trump for endorsing the Israeli claim to Jerusalem and for cutting funding for the UN agency.

Pence met Egyptian President Abdel-Fattah al-Sisi on Saturday and held talks with Jordan's King Abdullah II on Sunday before arriving in Israel.

Palestinian President Mahmoud Abbas will not meet Pence. He called Trump's Jerusalem declaration "a slap in the face".

On Tuesday, Pence will visit the Western wall in East Jerusalem, a Jewish holy site at the foot of the Al-Aqsa Mosque compound, a flashpoint site sacred to both Muslims and Jews and a focal point of the unrest in East Jerusalem.

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