Departing from a long-standing US position, Trump promised he would recognize al-Quds as Israel's capital and relocate the American mission there, a pledge that drew a fierce rebuke from Palestinian officials and concern from the European Union.
"The US embassy must move here to Jerusalem (al-Quds)," Netanyahu said after his weekly cabinet meeting.
"Jerusalem is Israel's capital and it would be good if the American embassy wasn't the only one to move here... I think that with time the majority of embassies will move to Jerusalem," he was quoted as saying by his office, AFP reported.
The Palestinians regard east al-Quds as the capital of their future state.
The city's status is one of the thorniest issues of the decades-long Israeli-Palestinian conflict.
Israel occupied the West Bank and east al-Quds in 1967. It later annexed east al-Quds in a move never recognized by the international community.