Spokesman Santiago Palomo told AFP that the high court's five magistrates turned down a request from lawyer Marco Vinicio Mejia, who argued in a petition filed in January that the embassy move was contrary to international law.
The decision in December by President Donald Trump to transfer the US embassy from Tel Aviv to the disputed city of Jerusalem has drawn widespread condemnation, with critics saying it damages hopes for a negotiated Middle East peace.
Only seven small countries -- including Guatemala and Honduras -- sided with the United States and Israel on a nonbinding December 21 UN General Assembly resolution rejecting Trump's decision to recognize Jerusalem as Israel's capital.
Guatemalan President Jimmy Morales however soon followed Trump's move, making Guatemala the first country to do so.
Morales, who made the announcement on Facebook, said that Guatemala was a nation of "Christian thought," adding that "Israel is our ally and we must support it."
In his brief, Mejia argued among other things that an order issued over social media like Facebook carried no legal standing.
The court said in its ruling that "the circumstances" did not make it "advisable" to grant an injunction, though it suggested that the matter was not definitively resolved.
US ambassador to the United Nations Nikki Haley on Wednesday thanked Morales for his support on the Jerusalem question.
Guatemalan Foreign Minister Sandra Jovel said she has received calls from the Palestinian Authority asking for Guatemala to reconsider its stance.
But the country's position, she said, was irreversible.
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