Jerusalem/Gaza: As Palestinian protests erupted in the occupied West Bank and the Gaza Strip following the United States recognition of Jerusalem as Israel's capital, Hamas urged Palestinians to abandon peace efforts and launch a new uprising against Israel. US officials appeared to remain hopeful of an eventual Israel-Palestinian settlement.

Seventeen people were wounded by Israeli army gunfire in the West Bank cities of Hebron and Al-Bireh, thousands of demonstrators rallied with chants of "Jerusalem is the capital of the State of Palestine", witnesses said. 

Some protesters threw rocks at soldiers and others chanted: "Death to America! Death to the fool Trump!"

 At least 31 people were wounded by Israeli gunfire and rubber bullets, medics said.

One protester was hit by live fire and another 14 by rubber bullets, medics said. A military spokeswoman said soldiers had used "riot-dispersal gear" against hundreds of rock-throwers.

In the Gaza Strip, dozens of protesters gathered near the border fence with Israel and threw rocks at soldiers on the other side. Two protesters were wounded by live fire, one was in a critical condition, medics said.

The Israeli military said on Thursday that two rockets launched at Israel from the Gaza Strip fell short inside the Palestinian enclave.

Sirens sounded in Israel at various locations around the northern Gaza Strip on a day of heightened tensions following demonstrations.

"Following the sirens that sounded in Hof Ashkelon and Sha'ar HaNegev regional councils in southern Israel earlier this evening, two launches from the Gaza Strip towards Israel were identified. No hits were confirmed in Israeli territory. Hits were confirmed within the Gaza Strip," an army statement said.

There was no initial claim of responsibility from any militant groups in the Gaza Strip. Israel often responds swiftly with air strikes and tank fire to militant rocket launchings from the territory.

Palestinian factions called for a "Day of Rage" on Friday, and on Thursday a wave of protest in the West Bank and Gaza brought clashes between Palestinians and Israeli troops.

"We should call for and we should work on launching an intifada (Palestinian uprising) in the face of the Zionist enemy," Hamas leader Ismail Haniyeh said in a speech in Gaza.

Naser Al-Qidwa, an aide to Western-backed Palestinian President Mahmoud Abbas and senior official in his Fatah party, urged Palestinians to stage protests but said they should be peaceful.

Israel considers Jerusalem its eternal and indivisible capital. Palestinians want the capital of an independent state of their own to be in the city's eastern sector, which Israel captured in the 1967 Middle East war and annexed in a move never recognised internationally.

​The reversal of decades of US policy has imperilled Middle East peace efforts and upset the Arab world and Western allies alike.

The decision marks the "worst and most dangerous" to come from any American administration, Lebanese Hezbollah's parliamentary bloc said on Thursday.

Israeli Prime Minister Benjamin Netanyahu hailed Trump's announcement as a "historic landmark".

Other close Western allies of Washington, including France and Britain, have been critical of Trump's move. Pope Francis has called for Jerusalem's status quo to be respected, while China and Russia have expressed concern.

Trump's decision has raised doubts about his administration's ability to follow through on a peace effort that his son-in-law and senior adviser, Jared Kushner, has led for months aimed at reviving long-stalled negotiations.

Haniyeh called on Abbas to withdraw from peacemaking with Israel and on Arabs to boycott the Trump administration. Abbas said on Wednesday the United States had abdicated its role as a mediator in peace efforts.

US officials, in an apparent effort to limit fallout over his break with longtime US policy, said US President Donald Trump assured Abbas a peace plan being put together would please the Palestinians..

Trump's phone call to Abbas on Tuesday, the day before he made his bombshell announcement on Jerusalem, appeared to shed new light on behind-the-scenes efforts by White House advisers to craft a peace blueprint expected to be rolled out in the first half of 2018 but which has now been thrown into doubt because of an angry outcry across the Middle East.

With Palestinians declaring it will be difficult for the United States to act as an honest broker after essentially siding with Israel on one of the central disputes in the conflict, administration officials said they expected a "cooling-off period".

Trump's team, led by his son-in-law and senior adviser, Jared Kushner, will press on with development of a plan to serve as the foundation for renewed Israeli-Palestinian negotiations, hoping the furore will blow over and that any pause in diplomatic contacts with the Palestinians will not last long, US officials said.

Israel and the United States consider Hamas, which has fought three wars with Israel since 2007, a terrorist organisation. Hamas does not recognise Israel's right to exist and its suicide bombings helped spearhead the last intifada, from 2000 to 2005.

Palestinians switched off Christmas lights on trees outside Bethlehem's Church of the Nativity.

Reuters