Guatemala was one of only a few nations that backed Trump's decision in December to recognize Jerusalem as Israel's capital and is only the second country to move its embassy to the holy city.
Prime Minister Benjamin Netanyahu was present Wednesday morning as Guatemalan President Jimmy Morales spoke of the "love, peace and fraternity" his country is bringing to Israel, hailing the move as a "courageous decision".
The US and Guatemalan moves break with decades of global consensus. Turkey expelled Israel's ambassador.
And Al Jazeera reports Paraguay plans to move its embassy to Jerusalem by the end of May.
The inauguration of the Guatemalan embassy, which was attended by Israeli Prime Minister Benjamin Netanyahu and Guatemalan President Jimmy Morales, also comes amid outrage over the Israeli army's killing of 62 Palestinians protesting in the Gaza Strip on Monday. You were always among the first.
In his remarks, Netanyahu praised Morales and highlighted Guatemala and Israel's long history of close bilateral relations between the two countries.
The Israeli army and police deployed thousands of officers in Jerusalem and along the Gaza Strip for the USA embassy relocation ceremony. The move has infuriated Palestinians and drawn widespread worldwide condemnation.
It says its actions are necessary to defend the border and stop mass infiltrations from the Palestinian enclave, which is run by Islamist movement Hamas. The Gaza protesters hurled firebombs and stones towards Israeli troops across the border.
The embassy move aggravated the conflict between Palestinians and Israel. Israel, however, accused Hamas militants of carrying out bombing and shooting attacks under the cover of the protests.
Evangelicals want to see Jews rebuild their temple in Jerusalem, which according to their beliefs would facilitate the second coming of Christ.
"The Guatemalan government has chosen to stand on the wrong side of history, to side with violations of global law and human rights, and to take a hostile step against the Palestinian people and the Arab world", he wrote in a statement.
"We are not surprised that a president that has objected to United Nations investigations into corruption and abuses of power has chose to further violate global resolutions".
Morales said Israel and Guatemala have a "deep friendship", hoping that other countries will follow the same move.
The embassy is located in Jerusalem's southern Malkha neighborhood.
United States opened its embassy in Gaza on Monday.
On Tuesday Palestinian president Mahmud Abbas withdrew his top representative to the United States.
Israel captured east Jerusalem in the 1967 Mideast war, but it is not recognised by global community.
Since the 1967 war when Israel occupied East Jerusalem, the worldwide community, as documented in a multitude of United Nations resolutions, supported the establishment of a Palestinian state on the occupied West Bank and Gaza Strip with East Jerusalem as the capital.
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