However, he did not retreat from his decision to support moving it to Jerusalem.
KELEMEN: Several Arab leaders have done that.
Most of the world does not recognize Jerusalem al-Quds as Israel's capital and the city is considered occupied territory.
Israel fought back and its victory left it in control of East Jerusalem and the wider West Bank beyond.
The White House insists that Trump is merely delaying and not abandoning his pledge to relocate the embassy.
After months of fierce debate within his administration, Trump chose to continue his predecessors' policy of signing a six-month waiver overriding a 1995 law requiring that the embassy be transferred to Jerusalem, an action that would have complicated his efforts to restart Israeli-Palestinian peace talks.
But Netanyahu's office said Israel appreciated Trump's statement of "friendship".
Palestinian leaders are cheering the move.
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"In timing such a move he will seek to maximize the chances of successfully negotiating a deal between Israel and the Palestinians". The President also met with Palestinian President Mahmoud Abbas in Bethlehem.
"As much as he wanted the move to occur", former U.S. Ambassador Dan Shapiro wrote on Twitter, "he didn't want it forced when it could disrupt the overriding strategic goal of completing successful negotiations [with] the Palestinians".
The Palestinians claim east Jerusalem as their capital.
His office said it believes all embassies should be based in what it called Israel's "eternal capital".
Aides stated Trump's decision is a postponement and the President intends to relocate the embassy to Jerusalem when the conditions allow it.
On the campaign trail, Mr Trump repeatedly pledged that he would move the embassy from Tel Aviv to the city claimed as capital by both Israel and its Palestinian neighbours, and he appointed a USA ambassador who shares this goal. Wasn't it thought that Jordan's king, for example, had brought this up and warned the president not to do this?
The Western Wall, which is one of the holiest sights in Judaism, is in Jerusalem. "We're looking at it very, very strongly".
During his first official visit to Israel and the Palestinian territories last month, Trump said there was "an exceptional opportunity" to achieve peace between Israelis and Palestinians. Many Palestinians (and other Middle Eastern Muslims) will consider "peace" only when Israel is wiped off the map, so moving the USA embassy nearly couldn't make things worse.
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