President Mahmoud Abbas' comments came amid a diplomatic push by the Palestinian leader to rally international support against the possible American move later this week.
"Any American step related to the recognition of Jerusalem as capital of Israel, or moving the US Embassy to Jerusalem, represents a threat to the future of the peace process and is unacceptable for the Palestinians, Arabs and internationally," Abbas told a group of visiting Arab lawmakers from Israel, according to the official Wafa news agency.
Israel regards Jerusalem as its capital, with most government functions, including the prime minister's office, Supreme Court and parliament, located in the holy city.
But the international community says the city's status should be determined through peace talks. The Palestinians claim east Jerusalem, captured by Israel in 1967, as their capital.
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Abbas' spokesman, Nabil Abu Rdeneh, said late Saturday that the president has been in touch with Arab and world leaders to rally opposition against any American move on Jerusalem.
The White House, led by Trump's adviser and son in law, Jared Kushner, has held months of meetings with leaders across the region ahead of an expected peace initiative.
While the proposal is expected to be regional in scope, little is known about the details, including whether Trump will continue the policies of recent predecessors in supporting the notion of an independent Palestinian state.
Ahead of Kushner's comments, the chief Palestinian negotiator, Saeb Erekat, urged the U.S. not to move forward with any change on Jerusalem's status.
Doing so, he said, "is not only going to promote international anarchy and disrespect for global institutions and law, but it will also be disqualifying itself to play any role in any initiative toward achieving a just and lasting peace.