Israeli Prime Minister Benjamin Netanyahu praised Guatemala for the move and recalled that the country was "among the first" to recognize Israel as a sovereign nation after its founding 70 years ago.
Following in the United States' footsteps, Guatemala opened on Wednesday its Israel embassy in the holy city of Jerusalem.
Guatemala on Wednesday celebrated the opening of its new embassy in Jerusalem, following suit after the US move that sparked violent protests along the Israeli-Palestinian border.
"You are always among the first, always among the first.We remember our friends, and Guatemala is our friend - then and now", Netanyahu went on, recalling that Guatemala was the second nation, after the USA, to recognize Israel in May 1948.
Israel considers the entire city its capital, while the Palestinians see east Jerusalem as the capital of their future state.
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This comes two-days after the United States (US) inaugurated its embassy in Jerusalem.
Israel has faced wide-spread criticism over its use of live fire, but says its actions are necessary to defend the border.
Netanyahu also promised to visit Guatemala in his next trip to Latin America, according to the several media reports.
"The mere fact of approaching a fence is not a lethal, life-threatening act, so that does not warrant being shot". A day later, Israel expelled Turkey's consul general in Jerusalem while Turkey expelled Israel's ambassador in Ankara.