Addressing the crowd today via video link, Hizbollah leader Hassan Nasrallah described Trump's policy change as a "foolish decision" that would mark the "beginning of the end" of the Jewish state.
"The most important response will be to announce a third Palestinian intifada on all occupied Palestinian territories," he said, using an Arabic term that evokes earlier uprisings.
Lebanon harbours more than 500,000 Palestinian refugees, many of whom fled their homes in what is now Israel and the West Bank during the wars of 1948 and 1967. The Lebanese state has never formally recognised their status as refugees, and Palestinians are barred from dozens of professions.
Sitting on the footpath during Nasrallah's speech was Alia Shahata, born in 1948 to parents who she said left Palestine after being expelled from their home.
"Trump is humiliating all Arabs with his decision," she said. "My family has no rights here in Lebanon. Our boys all work on coffee stalls inside the refugee camp. Know that we would all go back to Palestine tomorrow if we could."
As she spoke, a group of boys no older than 10 posed for photographs in the street, dressed in military fatigues and raising their hands in salutes like Hizbollah's fighters. Founded in response to Israel's 1982 invasion of Lebanon, Hizbollah, a Shia militia backed by Iran, has also played a key role in turning the tide of Syria's civil war in favour of President Bashar Assad.
Trump's decision to officially recognise Jerusalem as Israel's capital has drawn widespread condemnation from allies around the world, many of whom had seen the city's eventual status as a matter to be settled in a peace agreement between the Israelis and Palestinians.
European Union foreign policy chief Federica Mogherini said today that the 28-member bloc delivered a "clear and united" message to Israeli Prime Minister Benjamin Netanyahu on a visit to Brussels, and that the only "realistic" solution is for two states, with Jerusalem as their shared capital.
She squarely rejected Netanyahu's public remarks that he expects European nations to follow the US lead and move their embassies as well. "He can keep his expectations for others," she said.
In his speech, Netanyahu said Trump had put "facts on the table" with the recognition of Jerusalem, which he said makes peace possible by recognising reality.
But at home in Israel, the fallout continued. Israel's military said a rocket was launched towards its territory from the Gaza Strip, although authorities were not sure whether it landed on the Israeli side of the border fence. Israel responded by bombing two Hamas military posts in southern Gaza.
It was not clear who fired the rocket, but Israel holds the militant group responsible for all aggressive actions from the Gaza Strip. No casualties were reported in the exchange.
Hamas has called for an uprising, or intifada, against Israel in the wake of the Jerusalem announcement. Two of its militants were killed after Israel responded to rocket fire last week, while two protesters who Israel said were rolling burning tires and throwing rocks were also fatally shot near the border, the first lives claimed in violence related to Trump's decision.
