The deaths include 57 adults and children who were shot and a baby who died from the effects of tear gas inhalation.
The bloodshed marks the deadliest day in the region since the 2014 Gaza war, with Israeli soldiers firing at protesters who had to flee for cover.
While both France and Britain called for restraint from Israel, the US blamed Hamas for the violence, with White House spokesperson Raj Shah saying the Palestinian group "is intentionally and cynically provoking this response".
The opening of the US embassy coincided with the 70th anniversary of Israel's founding.
But it also marks the anniversary of the "nakba", or catastrophe, when hundreds of thousands of Palestinians fled or were expelled from present-day Israel during the 1948 war.
Israel captured East Jerusalem in the 1967 Middle East war and annexed it in a move not recognised by the international community.
Alistair Burt, the UK's minister for the Middle East, said: "The violence today in Gaza and the West Bank has been shocking.
"The loss of life and the large number of injured Palestinians is tragic, and it is extremely worrying that the number of those killed continues to rise.
"Such violence is destructive to peace efforts."
South Africa and Turkey have recalled their ambassadors to Israel and the US for "consultations"