The Quds (Jerusalem) Day commemorations, which are held on the last Friday of the Muslim holy month of Ramadan, were launched by Iran's revolutionary leader Ayatollah Ruhollah Khomeini and are held by pro-Iranian groups across the region.
Demonstrators burnt US and Israeli flags and effigies of Trump and Israeli Prime Minister Benjamin Netanyahu.
They held up posters reading "Quds, the eternal capital of Palestine" and "no to the deal of the century."
In similar protests in Baghdad, flags of the United States and the Jewish state were set ablaze and portraits of Trump and Netanyahu trampled as pro-Iranian militias marched through the streets.
The long-awaited "deal," which has yet to be unveiled by its architect, Trump son-in-law Jared Kushner, has already been rejected by the Palestinians, who say Trump's policies have shown him to be blatantly biased in favor of Israel.
High-ranking officials attended the Tehran rally, including President Hassan Rouhani, Foreign Minister Javad Zarif and parliament speaker Ali Larijani.
"Undoubtedly, the deal of the century will become the bankruptcy of the century," the state news agency IRNA quoted Rouhani as telling reporters at the rally.
On his arrival in the White House more than two years ago, Trump proclaimed his ambition to secure a final accord ending the Israeli-Palestinian conflict.
But the odds of his succeeding where every previous US president – Republican as well as Democrat – has failed appear particularly low.
Palestinians have broken all contacts with the Trump administration since he recognized Jerusalem as the capital of Israel in December 2017.
Kushner, who was in Jerusalem on Friday on the latest leg of a regional tour to sell the plan, has looked to an alliance with Saudi Arabia against Iran as a way to gain Arab support.
The US is expected to roll out the economic aspects of the peace plan at a conference in Bahrain on June 25-26.
The US State Department confirmed on Thursday, May 30, that it would go ahead despite a snap Israeli general election set for September. – Rappler.com