Donald Trump has threatened to cut off US financial aid to Palestinians 'unless they sit down and negotiate peace'.
President Trump made the comments at the World Economic Forum in Davos, ahead of a meeting with Israeli Prime Minister Benjamin Netanyahu.
The US President said his country gives "hundreds of millions of dollars" to the Palestinian Authority, and accused them of 'disrespecting' the US during Vice President Mike Pence's recent visit to the Middle East.
Speaking to reporters, President Trump said: "When they disrespected us a week ago by not allowing our great Vice President to see them - and we give them hundreds of millions of dollars in aid and support - tremendous numbers; numbers that nobody understands. That money is on the table, and that money is not going to them unless they sit down and negotiate peace.
"Because I can tell you that Israel does want to make peace. And they’re going to have to want to make peace too, or we’re going to have nothing to do with it any longer."
Great bilateral meeting with Prime Minister Theresa May of the United Kingdom, affirming the special relationship and our commitment to work together on key national security challenges and economic opportunities. #WEF18 pic.twitter.com/FPP8aRDAyt
— Donald J. Trump (@realDonaldTrump) January 25, 2018
President Trump's recent decision to recognise Jerusalem as Israel's capital city led to international criticism, as well as clashes between Palestinian protesters and Israeli security forces in the West Bank and Gaza Strip.
It also resulted in a vast majority of nations backing a UN General Assembly resolution to declare the decision as 'null and void'.
Palestinian President Mahmoud Abbas rejected the US decision, and suggested the UN should replace the US as a mediator in Middle East peace talks.
Today, President Trump said it was his 'honour' to make the Jerusalem decision.
He argued: "We took Jerusalem off the table, so we don’t have to talk about it anymore. They never got past Jerusalem. We took it off the table. We don’t have to talk about it anymore."
Mr Netanyahu, meanwhile, praised President Trump's controversial decision and recent moves by US officials to expedite the planned movement of the US embassy in Israel from Tel Aviv to Jerusalem.
He said: "I want to say that this is a historic decision that will be forever etched in the hearts of our people for generations to come.
"People say that this pushes peace backward. I say it pushes peace forward."