Jerusalem is the seat of government for Israel, so what is wrong with having embassies closer to the seat of government.
The job description of an embassy is to represent a country’s government in another country and to assist its citizens who are living, working, or traveling there. Some of the responsibilities of an embassy include:
Diplomatic matters: Handling diplomatic matters, including preparing international treaties and official state visits
Visa and passport services: Issuing visas and passports. Providing consular services to citizens, such as reporting births, deaths, marriages, and divorces, political, economic, and cultural relations.