Noting Trump's push for Middle East peace - the president meets Wednesday with Palestinian Authority President Mahmoud Abbas and is reported to be headed to Israel later this month - McMaster called on those present to back the initiative.
Separately, Israeli officials have reacted angrily to reports in local media that representatives of the American consulate had suggested the Western Wall did not belong to Israel.
"Moving the American embassy to Jerusalem would not harm the peace process", the prime minister said. "It's part of the West Bank", Israeli TV reported today.
At least 10,000 Israeli police will be deployed to protect Donald Trump during his visit to the Jewish state on 22-23 May.
The White House official did not say whether Netanyahu will be able to join Trump when he visits the Western Wall on his trip.
Palestinians argue moving the embassy would prejudge one of the most sensitive issues in the conflict, undermining America's status as an effective mediator.
The Prime Minister's Office categorically denied a claim by a Fox News correspondent that Netanyahu had asked Trump not to move the USA embassy to Jerusalem. Additionally, he all but ignores the fact that the Palestinian territories are governed by terrorists and terror-supporting regimes, while Israel is a free state and one of the few stable, reliable American allies in the Middle East.
Moving the embassy to Jerusalem would not only keep an unequivocal campaign promise but would also be in line with USA law, which three successive administrations have chosen not to observe over the past 18 years, by passing six-monthly national security waivers.
Israeli Prime Minister Benjamin Netanyahu, left, and President Donald Trump at a joint news conference Wednesday at the White House.
Adelson, the chairman and CEO of the Las Vegas Sands Corporation, has donated tens of millions of dollars to Republican candidates, mostly on the basis of their support for pro-Israel foreign policy.
Bennett said he welcomed Trump's arrival next week, but said Israel also has to stick to its positions. It later annexed east Jerusalem in a move never recognised by the worldwide community.
On Monday, Friedman, an Orthodox Jew, arrived in Israel to take up his new post and traveled straight to the Western Wall to pray.
A bankruptcy lawyer by profession, Friedman has no previous diplomatic experience.
U.S. Secretary of State Rex Tillerson told NBC's "Meet the Press" on Sunday that Trump was still seeking to assess whether relocating the embassy would help or harm chances for Israeli-Palestinian peace.
European and Arab allies of the United States have also advised against moving the embassy, saying it could lead to unrest.