Yom Yerushalayim (Jerusalem Day in Herbew) is the anniversary of the liberation and unification of Jerusalem under Jewish sovereignty that occurred during the Six Day War. It is one of four holiday (in addition to Yom HaShoah, Yom HaZikaron, and Yom HaAtzmaut) that were added to the Jewish calendar in the 20th century. Yom Yerushalayim is celebrated on the 28th of the month of Iyar (one week before Shavuot).
The liberation of Jerusalem in 1967 marked the first time in thousands of years that the entire city of Jerusalem, the holiest city in Judaism, was under Jewish sovereignty. The destruction of Jerusalem was a watershed event in Jewish history that began thousands of years of mourning for Jerusalem, so, it follows, that the reunification of Jerusalem should be a joyous celebration that begins the process of reversing thousands of years of destruction and exile. Jerusalem is central to the Jewish tradition. Jews face in the direction of Jerusalem and all of the prayer services are filled with references to Jerusalem.
The observance of Yom Yerushalayim outside of the city cannot compare to its celebration in reunited Jerusalem. In Jerusalem, thousands of people march around the city and walk through the liberated Old City, where Jews were denied access from 1948 to 1967 while it was under Jordanian control. The march ends at the Kotel (Western Wall), one of the ancient retaining walls surrounding the Temple Mount, Judaism's holiest site. Once everyone gets to the Kotel, there are speeches and concerts and celebratory dancing.
Rare in the Jewish liturgy, a festive Hallel is recited during the evening prayers. This practice is only done on the first night (and, outside of Israel, on the second night) of Passover and Yom HaAtzmaut. The Chief Rabbinate of Israel declared that the holiday version of Pseuki d'Zimra and Hallel should be recited. According to the major religious Zionist halakhists (decisors of Jewish law), even those who do not recite the blessing over Hallel (psalms of praise) on Yom HaAtzmaut should recite it on Yom Yerushalayim because the liberation and reunification over the entire city of Jerusalem is said to be of an even greater miracle than Jewish political sovereignty over part of the land of Israel.
Many religious leaders also hold that the mourning restrictions of 33 days of the omer are lifted on Yom Yerushalayim for those who observe them after Lag B'omer. In the Progressive (Reform) community in Israel, the prayerbook notes that Hallel should be recited on Yom Yerushalayim but the Masorti (Conservative) prayerbook does not. The American Conservative siddur Sim Shalom mentions that Hallel is recited "in some congregations" on Yom Yerushalayim. When it is celebrated in liberal Jewish communities the commemoration tends to include special programs on Jerusalem and festive celebration.
Despite the fact that the religious Zionist community in Israel holds that Yom Yerushalayim is even more important than Yom HaAtzmaut, the non-Orthodox diaspora Jewish community generally does not observe Yom Yerushalayim. This may be because the holiday makes politically liberal Jews uncomfortable as the status of Jerusalem in the international community is debated, and the international community does not recognize the liberation and restoration of Jewish sovereignty over Jerusalem as valid.