The Palestinian president's office has warned of the potential destructive effects of any move denying their claim to east Jerusalem as the capital of their future state.
"The American recognition of Jerusalem as the capital of Israel destroys the peace process," president Mahmud Abbas's spokesman Nabil Abu Rudeina said yesterday in a statement to AFP.
"The American recognition of Jerusalem as Israel's capital and moving the American embassy to Jerusalem involves the same level of danger to the future of the peace process and pushes the region into instability," he said.
The warning comes as US President Donald Trump is due to decide by Monday on whether to move his country's embassy from Tel Aviv to the disputed holy city.
Reports emerged that Trump could again delay moving the embassy but recognise Jerusalem as the capital of the Jewish state.
The Palestinians see east Jerusalem as the capital of their future state and fiercely oppose any changes that could be regarded as legitimising Israel's occupation and annexation of its eastern sector.
Without referring to Trump or the US by name, Abu Rudeina said any just solution in the Middle East required recognition of east Jerusalem as the capital of an independent Palestinian state.
"East Jerusalem, with its holy places, is the beginning and the end of any solution and any project that saves the region from destruction," he said in an earlier statement on the official Wafa news agency.
Israel occupied east Jerusalem in the Six-Day War of 1967 and later annexed it in a move never recognised by the international community.
No countries currently have their embassies in Jerusalem, instead keeping them in the Israeli commercial capital Tel Aviv.
Trump is due to decide by Monday on whether to renew a six-month waiver on moving the embassy. He pledged during his campaign to move the embassy to Jerusalem but renewed the waiver in May.
The US leader has said he wants to relaunch frozen peace talks between Israel and the Palestinians in search of the "ultimate deal"
Any major shift in US policy would make that goal more difficult to achieve, Middle East analysts say.
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