Commenting on Trump's tweets, Nabil Abu Rdainah, a spokesman for Palestinian President Mahmoud Abbas, said: "Jerusalem is not for sale, neither for gold nor for silver". The threat of pulling the more than $300 million off the table may be an attempt to get the Palestinians back to the negotiating table. "We're going to make sure that they come to the table and we want to move forward with the peace process".
But Jeremy Ben-Ami, of the liberal US Jewish pressure group J Street, said: 'The only thing the president has accomplished by saying he's taking Jerusalem "off the table" is to ensure he'll have no place at the table where the conflict will be resolved diplomatically and a peaceful, secure future for the Jewish or Palestinian peoples ensured. "The Palestinians now have to show the world they want to come to the table", Haley said.
Trump last month recognisedJerusalem as Israel's capital despite warnings from the Arab leaders, reversing decades of United States and worldwide policy on the holy city.
On Sunday, Mr Abbas said he would not accept any U.S. peace plan following Mr Trump's announcement.
The jab at the Palestinian Authority was not the first target of Trump's ire this week. "We wanted a peace process with the Americans and we worked hard for it", Nabil Shaath, PA President Mahmoud Abbas's worldwide affairs adviser, told The Jerusalem Post.
"They take hundreds of millions of dollars and even billions of dollars, and then they vote against us". In 2016, the U.S. gave the agency over $368 million and financed more than 30 percent of its overall budget.
Nikki Haley said when asked about future US funding for the UN Relief and Works Agency for Palestinian refugees (UNRWA). The tweets also came after the White House confirmed that the U.S. plans to withhold some of its aid to Pakistan to pressure the country into better counterterrorism cooperation with the US.
Early Tuesday, the Israeli parliament voted to make it more hard for both sides to negotiate Jerusalem in any peace negotiations.
The Likud Central Committee, the guiding group behind Prime Minister Benjamin Netanyahu's ruling party, voted unanimously over the weekend to approve a resolution calling for leaders to apply Israeli law to settlements in the West Bank.
Zomlot is due to return to Washington "after the holidays", official Palestinian news agency WAFA said.
"What we saw with the resolution was not helpful to the situation", Haley said on Tuesday.