He added that, acting in unison with the worldwide community, they will not recognize the USA decision, and demand recognition of a Palestinian state with its capital Jerusalem.
"The Palestinian leadership will not accept any offers for negotiations unless the American decision on Jerusalem is annulled", Erekat said.
Israeli Prime Minister Benjamin Netanyahu said the US should transfer its funds away from a United Nations agency that deals specifically with Palestinian refugees to another UN body that supports all the world's refugees.
Some of the payments take the form of contributions to the United Nations Relief and Works Agency for Palestine Refugees, or UNRWA.
The top PLO official revealed that the upcoming PLO Central Council meeting will "define the relationship with Israel in all its aspects and how to confront the US decision".
Rejecting any Israeli unilateral measures, he said the Arabs will push for a global recognition of Palestine.
Trump's decision on Jerusalem and announcement in December that the United States would start the process of moving its embassy from Tel Aviv enraged the Palestinians who said the United States can no longer broker peace with Israel.
Safadi says the Arab world would pursue a "global political decision to recognise the Palestinian state. with east Jerusalem as its capital".
"UNRWA is an organization that perpetuates the problem of the Palestinian refugees", he said according to AP.
One of the key proposals submitted by Jordan to maintain Arab pressure on Jerusalem is to push for a United Nations recognition of a Palestinian state in the West Bank with East Jerusalem as its capital.
The Palestinians would give up territories in the West Bank, "allowing Israel to annex the settlement blocs along with a generous amount of land around them", and Israel in turn would give Egypt a strip of territory along the southern border between the two countries.
He emphasized the importance of supporting the steadfastness of Jerusalemites and safeguarding the Arab identity of Jerusalem and Islamic and Christian holy sites in the city, and the need to build on the worldwide consensus regarding the legal status of Jerusalem, reported Petra.
Palestinians officials said Trump's move disqualified the USA from being a mediator in any Israel-Palestinian negotiations.
Trump's move was highly controversial around the world and led Pope Francis to say at the time, 'I can not keep silent my deep concern' over the issue.
Safadi indicated: "Our position as an Arab League and Arab countries regarding this resolution is clear, that it constitutes a violation of worldwide law and legitimacy and has no legal effect". But the Egyptian tapes are seen as reinforcement of the new reality: Saudi Arabia - referred to by the Times as "the most influential Arab state" and the author of the 2002 Arab Peace Initiative - has accepted Israeli sovereignty over Jerusalem as has Egyptian President al-Sisi. US Ambassador to the UN Nikki Haley announced earlier in the week that the Trump administration will halt aid to the Palestinians unless they agree to come to the negotiating table and participate in peace talks with the Israelis.