"We disagree with the US decision to move its embassy to Jerusalem and recognise Jerusalem as the Israeli capital," she said in a statement.
"We believe it is unhelpful in terms of prospects for peace in the region."
The prime minister reaffirmed that Britain's embassy to Israel would remain in Tel Aviv and her government's belief that the status of Jerusalem "should be determined in a negotiated settlement between the Israelis and the Palestinians".
"Jerusalem should ultimately be the shared capital of the Israeli and Palestinian states," said May. "We regard East Jerusalem as part of the Occupied Palestinian Territories."
But May, who sparred with Trump last week over the US president's retweeting of a British far-right group, said she shared her counterpart's "desire to bring an end to this conflict".
May urged the US to submit "detailed proposals" for an Israel-Palestinian settlement and called on all sides to refrain from violence.
Trump's declaration -- met by fierce regional condemnation -- ends seven decades of deliberate diplomatic ambiguity about the final status of a holy city vociferously claimed by both Israelis and Palestinians.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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