Israeli Prime Minister Benjamin Netanyahu greeted Mr Trump alongside Israeli President Reuven Rivlin, and described his visit as "truly historic".
"But behind such optimistic statements were also signs of obstacles in the path for peace between Israel and Palestine, with Netanyahu stating at the start of the speech, "[welcome to] Jerusalem, the eternal capital of the Jewish people and the united capital of the Jewish state".
U.S. President Donald Trump said on Monday that shared concern about Iran was driving Israel and many Arab states closer and demanded that Tehran immediately cease military and financial backing of "terrorists and militias". In the afternoon, at about 6 pm, he is scheduled to meet with Netanyahu and then dine at the prime minister's residence at a gala night. Standing alongside Israeli Prime Minister Benjamin Netanyahu, he argued he never mentioned Israel, the source of the classified intelligence, according to various officials - something he has not been accused of doing.
Arriving directly from Riyadh, Saudi Arabia, Mr Trump expressed his hope for cooperation among U.S. allies in the Middle East.
Lawmaker Oren Hazan, a politician in Netanyahu's Likud party with a reputation for inappropriate antics, gave Trump a taste of his own medicine by giving the president his own characteristic handshake.
U.S. President Donald Trump, right, and first lady Melania Trump wave as they board Air Force One for Israel, the next stop in Trump's worldwide tour, at King Khalid global Airport, Monday, May 22, 2017, in Riyadh.
During his visit, Trump is expected to make a push to relaunch long-stalled peace talks between Israel and the Palestinians. It comes a week after the USA alliance with Israel was put to the test amid reports that Trump divulged highly classified intelligence obtained by the Israelis during his meeting with the Russian foreign minister.
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"There is a growing realization among your Arab neighbors that they have common cause with you in the threat posed by Iran", he said, at a welcome meeting with President Rueven Rivlin. He toured the Church of the Holy Sepulchre, which by Christian tradition is where Jesus was crucified and the location of his tomb.
The visit raised questions about whether the US would indicate the site is Israeli territory.
On Tuesday, Trump sits down with Palestinian Authority President Mahmoud Abbas.
Trump was joined by first lady Melania Trump, his son-in-law Jared Kushner and daughter Ivanka Trump. Just before he brought up the information, Netanyahu said - apparently responding to a reporter - "The intelligence cooperation is terrific". Last month, Netanyahu praised the "great change" in foreign policy under Trump, adding that Defense Secretary James Mattis' words against Iran were "clear and forthright".
One point of contention in the talks: the fate of east Jerusalem, which Israel captured in the 1967 Mideast war. Tillerson referred to the visit as "a moment in time" and suggested that the US would take a more active role in the future in brokering a deal if both sides make serious commitments.
Tillerson on Monday also would only say: "The wall is part of Jerusalem".
By denying he said the word "Israel", Trump appears to have confirmed that the classified intelligence he shared with Russian officials earlier this month originated from the country he's now visiting as part of his global trip.