To comply with the Act is not feasible for political, diplomatic, and constitutional reasons too numerous and contentious to list here. So, every President since 1995 has invoked the waiver authority given him by Section 7 of the Act to suspend the funding limitations for six-month intervals, just like hitting the snooze button on a legislative alarm clock.
Here's the text of the current Presidential Memorandum - Suspension of Limitations Under the Jerusalem Embassy Act:
Presidential Determination No. 2010-03
MEMORANDUM FOR THE SECRETARY OF STATE
SUBJECT: Suspension of Limitations Under the Jerusalem Embassy Act
Pursuant to the authority vested in me as President by the Constitution and the laws of the United States, including section 7(a) of the Jerusalem Embassy Act of 1995 (Public Law 104-45) (the "Act"), I hereby determine that it is necessary, in order to protect the national security interests of the United States, to suspend for a period of 6 months the limitations set forth in sections 3(b) and 7(b) of the Act.
You are hereby authorized and directed to transmit this determination to the Congress, accompanied by a report in accordance with section 7(a) of the Act, and to publish the determination in the Federal Register.
Suspension shall take effect after transmission of this determination and report to the Congress.