Guatemala was one of nine nations that voted with the US and Israel when the UN General Assembly overwhelmingly adopted a non-binding resolution denouncing US President Trump's recognition of Jerusalem as Israel's capital.
Guatemalan President Jimmy Morales, currently engulfed in bitter corruption scandal and ally of Netanyahu, said on Sunday he had given instructions to move the Central American country's embassy in Israel to Jerusalem, a few days after his government backed the United States which despite international condemnation recognised Jerusalem as the capital of Israel.
In a short post on his official Facebook account, Morales said he decided to move the embassy from Tel Aviv after talking to Israeli Prime Minister Benjamin Netanyahu on Sunday.
This month US President Donald Trump recognised Jerusalem as the capital of Israel, reversing decades of US policy resulting in a wave of international opprobrium at what has been considered a dangerous and destabilising move for regional and global politics.
On Thursday this week, 128 countries defied Trump by backing a non-binding UN General Assembly resolution calling for the United States to drop its recognition of Jerusalem.
Guatemala was one of only a handful of countries to join the United States and Israel in voting against the resolution.
The United States is an important source of financial assistance to Guatemala, and Trump had threatened to cut off financial aid to countries that voted in favour of the UN resolution.