Paraguay will move its embassy in Israel to Jerusalem by the end of May, a Paraguay government spokesman and the Israeli foreign ministry said on Monday, following the United States and Guatemala.
It is not yet clear whether President Trump will attend, although he has indicated that he may.
Israel captured East Jerusalem from Jordanian control in the 1967 Middle East war and annexed it in a move not recognised internationally.
The signs, in English, Hebrew and Arabic, were installed by workmen close to the south Jerusalem location of a U.S. consulate building that will be repurposed as the embassy when it is officially relocated from Tel Aviv on May 14, Reuters news agency reported. Israel's continued occupation of the eastern part of the city is a major offense to Palestinians, so the recognition of Jerusalem as the Israeli capital poses a significant setback to the Arab-Israeli peace process.
The statement announcing Trump's decision listed the embassy's opening in "Jerusalem, Israel", the first known time the disputed city has been clearly listed as Israeli territory in an official US statement after Trump recognized Jerusalem as Israel's capital in December. "Jerusalem is our capital", she said.
The Minister of defence also said in Saturday's broadcast that attempts to disrupt the Grand opening of the American Embassy in Jerusalem in mid-may, but does not expect that such attempts will succeed. The city is claimed by Muslims, Christians and Jews to be historically important for them. The Palestinians, however, see East Jerusalem as the capital of their future state.
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Surprisingly the worldwide community, including the U.S. administration, does not recognise Israel's jurisdiction and ownership of Jerusalem.
Senior Palestinian official Saeb Erekat called in a statement Monday for diplomats, "civil society organisations, and religious authorities to boycott the inauguration ceremony" of the Jerusalem embassy.
The embassy move comes after Trump recognized Jerusalem as Israel's capital previous year, heightening Israeli-Palestinian tensions.
The U.S. hopes there is still a possibility for peace, however.
The embassy is expected to open next week.