FormerJerusalem mayor wants to prevent the reopening of the US embassy for Palestinians. The draft law is likely to be passed in the parliament.
The US move fulfilled a pledge by President Donald Trump, who has recognised the holy city as the Israeli capital, but it has fired Palestinian anger and drawn criticism from many foreign governments as a set back to peace efforts.
Tens of thousands of Palestinians are expected to attend large-scale protests along the Israeli border and in Jerusalem as the United States and Israel will launch formal opening on Monday, a move that draws criticism internationally.
Israeli soldiers shot dead a Palestinian man near the Gaza border while dozens of others were wounded on the "Day of Rage." A second person later died of his wounds, a Gaza hospital official said.
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