"Today's action ends the decades of ambiguity on US policy in the Middle East and paves the way to a lasting peace".
Erdogan called the United States embassy move from Tel Aviv to the disputed city of Jerusalem "very, very unfortunate" and said it "will increase tensions and ignite an even greater fire between communities".
The military said its troops came under fire in some areas, and said protesters tried to break through the border fence. With Israel and Hamas digging in, there is growing concern about large numbers of casualties.
However, Monday's protests - and those planned for Tuesday - are the culmination as they mark the anniversary of Israel's creation in 1948 and commemorate the hundreds of thousands of Palestinians who subsequently fled their homes or were displaced in the war that followed.
A majority of Gaza's two million people are descendants of refugees, and the protests have been billed as the "Great March of Return".
Russian President Vladimir Putin warned in December that the United States decision to move its embassy from Tel Aviv to Jerusalem "does not help regulate the situation in the Middle East but instead destabilises the already-complicated atmosphere". More protests are expected Tuesday.
Small groups have approached the border fence, throwing stones, burning tyres and hurling Molotov cocktails.
The military alleged some protesters threw rocks and Molotov cocktails, and burned tires.
It said Gaza activists used 10 explosive devices and firebombs against troops and that shots were fired at soldiers positioned along the border. "Malaysia strongly urges the worldwide community to act immediately to deescalate the situation and prevent further casualties among civilians", it said.
Parliament speaker Ali Larijani said the USA decision to move its embassy to Jerusalem was part of its attempts to undermine global institutions, along with its withdrawal from the Paris climate treaty and Iran nuclear agreement.
The United States opened its new Israel embassy in Jerusalem on Monday.
Israel regards all of Jerusalem, 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".
"In recent days Hamas terrorists backed by Iran have incited attacks against Israeli security forces and infrastructure".
Administration officials have dismissed Palestinian criticism, portraying the embassy opening as an essential step toward an eventual Israeli-Palestinian peace deal.
"They've been in office for a year and a half now and they still have not presented what the strategy is", Boyle said.
"Somewhere between zero and none", Martin Indyk, a former USA special envoy for Israeli-Palestinian negotiations in the Obama administration, said of the chances President Donald Trump might bring the two sides together and broker what he has called the "ultimate deal". "It's the right thing to do", a smiling Netanyahu told the jubilant crowd at a reception in Jerusalem late Sunday.
President Donald Trump said in a video message played at the embassy inauguration - which took place just 70 kilometers (45 kilometers) from the bloodshed on the Gaza border - that he remains committed to "facilitating a lasting peace agreement" between Israelis and Palestinians.
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