About 5,000 people flocked to Jakarta's landmark National Monument and unfurled Indonesian and Palestinian flags.
On Monday, the US plans to move its embassy from Tel Aviv to Jerusalem (al-Quds), five months after Trump recognized it as Israel's capital. Palestinians also claim it as their capital, AP reported.
"We, the Muslims, oppose all forms of colonialism and oppression of the Palestinians," said a speaker standing on the top of a car, greeted with shouts of "Allahu Akbar" (God is great).
The protest was organized by a new umbrella group that includes the most influential government-sanctioned Indonesian Ulema Council and some groups such as the Islamic Defenders Front — known by its Indonesian acronym FPI.
"Indonesia strongly condemns the (Trump's) decision," Indonesian President Joko "Jokowi" Widodo said in his speech Friday before a trilateral clerical meeting between Afghanistan, Indonesia and Pakistan. "Therefore I urge the (UN) Security Council and the General Assembly to discuss the issue and take further steps."
The protesters performed Friday prayers at the monument before dispersing.
Indonesia, the world's most populous Muslim nation, does not have diplomatic ties with Israel and has long been a strong supporter of Palestinian aspirations for statehood.