The protesters, some waving Palestinian flags, threw projectiles at security forces and set fires in the street next to the US Embassy, located in the Awkar region north of the Lebanese capital.
Authorities allowed protests at Irada Square and outside the Palestinian embassy in Kuwait City, but banned any demonstration near the American embassy.
Protesters burnt tyres, American and Israeli flags and an effigy of Mr Trump in front of a barricade that had been erected by police about a kilometre away from the United States embassy itself.
Security forces fired teargas and water cannon to disperse the angry protesters.
Palestinians see East Jerusalem as their future capital and are demanding the establishment of their own independent state. "I think the sooner the Palestinians come to grips with this reality, the sooner we'll move towards peace".
"Today we are struggling against Trump's decision", Mr Dawood said.
Along Israel's tense frontier with the Gaza Strip, the Israeli military on Sunday destroyed what it described as a "significant" cross-border attack tunnel dug by the enclave's dominant Islamist group, Hamas.More news: Bill O'Brien: Tom Savage initially cleared from concussion, then reevaluated
Pre-dawn Israeli airstrikes in the Gaza Strip on Saturday killed two Palestinian gunmen after militants fired rockets from the area into Israel on Friday.
Turkish President Recep Tayyip Erdogan called Israel a "terrorist" and "child-murderer state" in an address Sunday as he criticized President Donald Trump over his recognition of Jerusalem as Israel's capital.
The rallies follow protests against Trump's announcement in cities across the world, from Pakistan, Turkey, Iraq and Iran to France and the UK.
The Trump administration has said it is still committed to reviving Palestinian-Israeli talks that collapsed in 2014, and jettisoning old policies is necessary to break the deadlock.
"We won't leave Jerusalem to the mercy of a child-murdering country", Erdogan said, accusing Israel of having no values other than "occupation and plunder".
Jerusalem is a final status issue that must be resolved through direct negotiations between the two parties on the basis of the relevant Security Council and General Assembly resolutions, taking into account the legitimate concerns of both the Palestinian and the Israeli sides.