The EU, along with other major international powers, has repeatedly voiced deep concern this week about Trump's declaration.
"President Trump's announcement on Jerusalem has a very worrying potential impact. It is a very fragile context and the announcement has the potential to send us backwards to even darker times than the ones we're already living in," Federica Mogherini told a press conference in Brussels.
The EU, along with other major international powers, has repeatedly voiced deep concern this week about Trump's declaration. His move upends seven decades of US ambiguity on the highly contentious status of the holy city, which is claimed by both Palestinians and Israelis.
Trump's announcement sparked a Palestinian general strike and a call for a new "intifada" or uprising. The Israeli military deployed hundreds of more troops to the occupied West Bank.
The EU has long supported a two-state solution to the Israel-Palestinian conflict and Mogherini said the 28-member bloc would keep working with both sides -- as well as regional players such as Egypt and Jordan -- to restart direct talks.
Mogherini, who meets Jordanian Foreign Minister Ayman Safadi in Brussels on Friday and Israeli Prime Minister Benjamin Netanyahu on Monday, called for cool heads, saying demonstrations against the decision should be peaceful.
"What we truly need in these difficult times is wisdom and to listen to the wise voices calling for peace and peaceful reactions," Mogherini said.
"We believe this difficult moment calls for an even stronger engagement for peace. The most urgent priority now is that all relevant actors avoid to further escalate tensions on the ground," she added.
Netanyahu's visit, which is to include an "informal" breakfast with EU foreign ministers, was planned before Trump's announcement, but the Jerusalem issue is now set to dominate the meeting.
British foreign minister Boris Johnson said Trump's decision made it all the more urgent that what he called "the long-awaited American proposals on the Middle East peace process" were brought forward.
In recent months Trump's son-in-law and senior adviser Jared Kushner has been working with a small team to develop a new US proposal to revive peace talks between Israel and the Palestinians.
But a senior EU official said that despite close contact with Washington on the matter, "we have not seen elements of a plan for the moment".