Guatemala was one of only a few nations that backed Trump's decision in December to recognise Jerusalem as Israel's capital and it is only the second country to move its embassy to the holy city.
Guatemalan President Jimmy Morales also said in December that the country would move its embassy back to Jerusalem. "We remember our friends and Guatemala is our friend, then and now", Netanyahu said.
Prior to 1980, Guatemala and a dozen other countries maintained embassies in Jerusalem.
Prime Minister Benjamin Netanyahu meets with Guatemalan President Jimmy Morales in Washington, DC, on March 4, 2018.
The ceremony was attended by a large high-level American delegation, including Ivanka Trump and Jared Kushner, Israeli Prime Minister Benjamin Netanyahu and envoys from several countries. Unsurprisingly, such rhetoric has been matched this week by Netanyahu, who felt "moved" at the sight of Guatemala's flag flying in Israel's "eternal capital" after an absence of 38 years.
Guatemala opened an Embassy after the United States.
Guatemala Follows US, Opens Embassy in Jerusalem
Paraguay is scheduled to open a Jerusalem embassy on May 21 with its president, Horacio Cartes, due to be in attendance.
Reacting to the killings of Palestinians by Israeli forces Turkey has recalled its ambassadors from Israel and the USA for consultations.
According to the Palestinian Health Ministry, 109 Palestinian demonstrators have been killed by Israeli forces since the "right to return" protests began on March 30.
TRT World's correspondent Ediz Tiyansan reports from Guatemala.
U.S. president Donald Trump announced his decision in December to recognise Jerusalem as Israel's capital and move the American embassy there, triggering a joyous reaction from Mr Netanyahu's government.