President Trump says he is willing to withhold 'hundreds of millions of dollars' in aid from the Palestinians until they agree to pursing peace with Israel.
President Donald Trump on Thursday accused the Palestinians of disrespecting the United States and threatened to withhold aid worth hundreds of millions of dollars until they accede to US-brokered talks.
In a significant sharpening of his rhetoric against the leadership in Ramallah, Trump said the Palestinians had "disrespected us a week ago by not allowing our great vice president to see them."
"We give them hundreds of millions," Trump said during a meeting with Israeli Prime Minister Benjamin Netanyahu in Davos, Switzerland.
"That money is not going to them unless they sit down and negotiate peace."
The Trump administration is pressing sceptical Palestinians to enter a US-sponsored peace process that has so far appeared to offer much to their arch-foes Israel.
Palestinians were especially enraged by Trump's decision to recognise Jerusalem as Israel's capital -- which broke with decades of international consensus that the city would be the subject of negotiation.
Amid deadly unrest and fierce political pressure at home, Palestinian leader Mahmud Abbas responded by cancelling a planned meeting with US Vice President Mike Pence, who visited Egypt, Israel and Jordan.
The Palestinians rejected Trump's threat on Thursday, with one senior official labelling him an "oppressor".
A spokesman for president Mahmud Abbas said they would not meet with the US administration until it withdrew its recognition of Jerusalem as Israel's capital.
"If the American administration will not go back on their decision to recognise Jerusalem as the capital of Israel, it will remain outside the (negotiation) table," Nabil Abu Rudeina said.
Another senior Palestinian official, Hanan Ashrawi, told AFP "not meeting your oppressor is not a sign of disrespect; it is a sign of self-respect."
Trump touts 'great proposal'
Trump insisted that he could still be an honest broker.
"We have a proposal for peace. It is a great proposal for the Palestinians," Trump said, adding that Israel would also be forced to make concessions.
But the US president also doubled down, saying he would move the American embassy to Jerusalem as soon as next year, despite no suitably sized building existing.
"We anticipate having a small version of it open sometime next year," Trump said.
Netanyahu warmly welcomed Trump's "historic decision", saying it "recognises history, recognises a certain reality, built on the basis of truth."
Netanyahu, bolstered by Trump's unstinting support, later said he was willing to enter talks, but accused the Palestinians of avoiding negotiations.
Abbas has sought an internationally led process, accusing the Trump administration of blatant bias.
"Here, I think President Trump offers a refreshing point of view," Netanyahu said.
"He said ‘we're not going to let you just walk away... We want to see you enter the room and negotiate peace'."
Netanyahu added that "I think there's no substitute for the United States as the honest broker, as the facilitator. There's no other international body that would do it. It's a fantasy to think that you could get somebody else."
While Trump was speaking in Davos, his ambassador at the UN Nikki Haley was also turning up the heat on the 82-year-old Palestinian leader, Abbas.
Haley accused the veteran Palestinian president of lacking the courage needed for a peace deal.
"To get historic results, we need courageous leaders," she said.
The United States remains "deeply committed" to an Israeli-Palestinian peace deal, Haley said, "but we will not chase after a Palestinian leadership that lacks what is needed to achieve peace."
Earlier this month Abbas accused Trump of trying to make the Palestinians a scapegoat, by painting them as rejecting talks that did not exist.
"Shame on you," he said at the time.
He denounced Trump's peace efforts as the "slap of the century".
Trump said he had not seen those remarks.
"I think I'm probably better off not seeing them," the US president said.
"You know what, it's many years of killing people. It's many years of killing each other. They have to be tired and disgusted of it," he added.