David Friedman sat between Israel's President Rivlin and Prime Minister Netanyahu at the event on Sunday evening, the night before US President Trump arrived in Tel Aviv.
The ambassador is the first US representative to hold an office in Jerusalem and is an open supporter of Israel's claim to Jerusalem as its capital city. This personal position does not reflect on official US policy however.
During his acceptance ceremony as ambassador on May 16, Friedman said it was "time for the whole world to recognise Jerusalem as the official capital of the State of Israel — de facto, not just de jure."
"Jewish Jerusalem is not 50 years old. Since the days of King David, this city has been our capital," he said at the time.
A spokesperson for the US State Department told The New Arab: "We'd decline to comment."
Jerusalem was appointed an international city by a UN resolution in 1948 and both Israel and the Palestinian Authority claim it as their capital respectively.
A UNESCO document in May criticised Israel for its increased "annexation" of Jerusalem, adding that contruction by settler communities was "illegal under international law".
On the same day as Friedman's controversial statement, a US official in the State Department was asked by Netanyahu's office to explain his remarks that the Western Wall belonged to the West Bank.
The Western Wall falls outside the internationally-recognised borders created after the 1967 war, which are recognised by the US today.
Israeli settlement activity has pushed further and further into Palestinian territory in Jerusalem and elsewhere in the West Bank, as many right-wing conservative Israelis consider the whole of the West Bank to belong to Israel.
Friedman, a practicing Jew, went to visit the Western Wall to kiss its stones in the first few hours of his time in office.