Speaking at a meeting to discuss Lebanon, President Macron said the decision should not "add to the instability of the region. I'm issuing a call for calm and responsibility by everyone which is essential for the efforts we are undertaking here."
His concern was echoed by Lebanon's Prime Minister Saad Hariri, who said the decision "will complicate the peace process even more", adding it posed yet another challenge to the tense Middle East.
"I can only repeat our rejection of this decision and our commitment to the Arab initiative for a solution based on two states," Hariri said.
The French president's comments come as tensions soar in the Middle East over Trump's decision, with Palestinian Islamist movement Hamas calling for a "day of rage" on Friday.
The disputed city of Jerusalem lies at the heart of the Israeli-Palestinian conflict, with both sides seeing it as their capital.
Macron's Foreign Minister Jean-Yves Le Drian had earlier expressed concern over the situation, saying there was a risk of a new intifada, or Palestinian uprising.
"The United States, which until now has been able to play a mediation role in the Israeli-Palestinian conflict, have now excluded themselves from that a little," he told France Inter radio.
Washington is "isolated in this affair", he added.
Ahead of a trip to France on Sunday by Israeli Prime Minister Benjamin Netanyahu, Le Drian said "France can act, but it cannot act alone".
"We must pursue the necessary mediation to allow calm to return, so that we can commit to a negotiation process," he said.
- with AFP