The Jerusalem embassy is to be opened in an existing USA facility that will be "retrofitted" to meet safety and security requirements, Undersecretary of State Steve Goldstein told reporters in Washington.
"Our President made his decision.we believe that his decision is in the best interests of peace".
Pence said during a meeting on Tuesday with Israel's President Reuven Rivlin that he hopes European allies will join with the United States to addressed flawed parts of the agreement.
Yet Pence, in an interview with The Associated Press after the speech, said he remained hopeful that the Palestinians would re-enter negotiations.
Abbas told European Union diplomatic chief Federica Mogherini that the Palestinians were still committed to the stalled Middle East peace process and urged the bloc to take a more "political" role.
Pence had earlier expressed his honor at being in "Israel's capital", in a move that continued Washington's break with decades of policy toward the conflict.
Trump also said in a statement that the US would not waive sanctions again.
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Pence again argued that the president's decision would help move the peace process along.
In Gaza meanwhile, the Hamas leader Ismail Haniyeh said today that Pence's tour in Israel was "unwelcome, ' adding that his speech at the Knesset 'proves the United States of America has a strategic alliance with the Zionist entity".
"In the weeks ahead, our administration will advance its plan to open the U.S. Embassy in Jerusalem", said Pence.
The evangelical Christian's speech to the Israeli parliament on Monday laden with biblical references was praised by right-wing Israelis, but Palestinians saw it as confirming some of their worst fears. "I don't think anybody believes the United States can be replaced in this process".
"The peace plan that the Americans offer is fake and gives legitimacy to Israeli settlements on Palestinian lands", Maslimani added.
The Palestinians have been deeply angered by the declaration and are boycotting Pence's visit. According to Palestinian local media, he will urge EU High Representative for Foreign Affairs Federica Mogherini and 28 foreign ministers to play a more active role in the Middle East peace process, after declaring that he would no longer accept the Trump administration as an arbiter in future negotiations with Israel.
Vice-President Mike Pence, visiting Jerusalem, announced the timing of the move in a speech to Israel's parliament, earning applause from Israeli legislators but also stirring a brief protest by Israeli Arab lawmakers, who held signs reading "Jerusalem is the capital of Palestine".
Many Israelis are likely to interpret the Western Wall visit as Pence further backing their claim over the entire city. Muslims revere the mount as the Haram Sharif, or Noble Sanctuary, the third-holiest site in Islam.