U.S. President Donald Trump met with Prime Minister Benjamin Netanyahu at the World Economic Forum in Davos, Switzerland, on Thursday. Ahead of their meeting, Trump announced that the U.S. had taken Jerusalem off the negotiating table.

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The two were expected to discuss Trump's promise to "fix" the nuclear deal with Iran and the Trump administration's efforts to restart peace negotiations between Israel and the Palestinians.

Trump and Netanyahu speak to the press in Davos, Switzerland.

>> Palestinians respond to Trump: If Jerusalem off table, then U.S. no longer has seat at the table <<

Palestinian President Mahmoud Abbas fired back at Trump, telling him that if Jerusalem is off the negotiating table then the U.S. no longer has a seat at that table, officials for the Palestinian leader said.

Speaking to media before his meeting with Trump, Netanyahu noted that this is the first time the two are meeting after Trump recognized Jerusalem as Israel's capital. "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," said the prime minister.

"People say that this, that it pushes peace backward. I say it pushes peace forward, because it recognizes history, it recognizes the present reality. And peace can only be built on the basis of truth."

'Money is on the table'

Open gallery view U.S. President Donald Trump waves upon his arrival with Secretary of State Rex Tillerson for the World Economic Forum annual meeting in Davos, Switzerland, January 25, 2018. Credit: FABRICE COFFRINI/AFP

Trump criticized the Palestinians, who refused to meet Vice President Mike Pence during his visit to Israel this week in protest over the administration's decision to recognize Jerusalem as Israel's capital.

"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," said Trump.

"That money is on the table. That money is not going to them unless they sit down and negotiate peace" with Israel, he said.

The U.S. president also said that he has "a proposal for peace," adding that "We have a great proposal for the Palestinians, it covers a lot of the things we discussed over the years."

However, Trump then noted that the U.S. had taken the issue of Jerusalem out of the talks. "They never got past Jerusalem. We took it off the table. We don’t have to talk about it anymore." Turning to Netanyahu, he said, "You win one point, and you’ll give up some points later in the negotiation, if it ever takes place. I don’t know that it ever will take place."

"But they have to respect the process also," he added.

Trump's statement that Jerusalem is "off the table" contradicts what he himself said and what his vice president recently told Israelis: that the U.S. decision to recognize the city as Israel's capital will not influence the final status of its borders.

"I hope the Palestinians want to make peace," Trump said. He then added: "We give them tremendous amounts, hundreds of millions of dollars a year. That money is on the table. Why should we do that, if they’re doing nothing for us."

The U.S. ambassador to the UN meanwhile criticized Abbas at the UN, saying Thursday that the Palestinian leader "lacked the courage and the will to seek peace."

The meeting between the heads of state took place just 72 hours after Netanyahu met with U.S. Vice President Mike Pence in Jerusalem, who promised that the United States would move its embassy from Tel Aviv to an existing consular office in Jerusalem by the end of 2019.

The only other bilateral meeting that Trump was scheduled to have with a world leader on Thursday was with British Prime Minister Theresa May.

Meanwhile, First Lady Melania Trump made an unannounced visit to the U.S. Holocaust Memorial Museum in Washington on Thursday morning. A White House official said that she decided to visit the museum ahead of International Holocaust Remembrance Day, which will be marked this weekend.

Melania Trump was supposed to join her husband at Davos but canceled her participation earlier this week