Jerusalem's status is perhaps the thorniest issue in the Israeli-Palestinian conflict and the USA embassy relocation infuriated the Palestinians.
"You were always among the first", he said.
In December, President Donald Trump announced he would move the US embassy in Israel from Tel Aviv to Jerusalem and that he would recognize Jerusalem as the capital of the country.
Israel captured east Jerusalem in the 1967 Mideast war, but it is not recognised by worldwide community.
Israel considers the entire city its capital, while the Palestinians see east Jerusalem as the capital of their future state. 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.
On Monday, tens of thousands had gathered near the border while smaller numbers of stone-throwing Palestinians approached the fence and sought to break through, with Israeli snipers positioned on the other side.
Israel's army said "it appears that at least 24" of those killed were militants, mainly from Hamas and Islamic Jihad. It was considered as the bloodiest day of cross-border firing since a 2014 war between Israel and Hamas. The move has infuriated Palestinians and drawn widespread global condemnation. Angelina Solis, Guatemala's ambassador to Israel, hailed her country's decision to return to Jerusalem as a "brave" and "historic" and revealed her belief that "a lot of blessings will come after this decision". Consul general and several European countries summoned the Israeli ambassadors to their foreign ministries.
"We are not surprised that a president that has objected to United Nations investigations into corruption and abuses of power has made a decision to further violate worldwide resolutions".
And Al Jazeera reports Paraguay plans to move its embassy to Jerusalem by the end of May. In the ceremony which was held on Wednesday, Morales said that Guatemala was bringing a message of "love, peace and fraternity" to Israel.
In his remarks, Netanyahu praised Morales and highlighted Guatemala and Israel's long history of close bilateral relations between the two countries.
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