“That money is on the table and that money is not going to them unless they sit down and negotiate peace,” Trump said during a meeting with Israeli Prime Minister Benjamin Netanyahu at the World Economic Forum in Davos, Switzerland.

The president knocked Palestinian President Mahmoud Abbas for refusing to meet with Vice President Pence during his recent Middle East trip, a protest against Trump’s decision to move the U.S. Embassy in Israel to Jerusalem and recognize that city as Israel's capital.

“They disrespected us a few weeks ago by not allowing our great vice president to see them,” Trump said.

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Trump’s warning comes after the U.S. announced it was withholding $65 million in aid to the United Nations agency that serves Palestinian refugees. The State Department said the agency must make reforms.

Middle East peace talks have ground to a halt following Trump’s announcement regarding the embassy.

The president, however, argued the Palestinians should not be upset with the United States' decision to recognize Jerusalem as the Israeli capital, even though they want east Jerusalem as a capital of a future Palestinian state.

Trump said the move should help the peace process because it takes the contentious issue of Jerusalem off the table.

“You won one point," Trump told Netanyahu. “You'll give up some points later in the negotiation, if there's ever a negotiation."

Netanyahu said the decision is “forever etched in the hearts of our people for generations to come.”

A spokesman for Abbas reiterated during a phone call with CNN after Trump's remarks that the Palestinian Authority no longer recognizes the U.S. as a mediator in the peace process.

“If Jerusalem is off the table, then America is off the table as well,” Nabil Abu Rudeineh said.

Abu Rudeineh added that there will be no negotiations until the Trump administration agrees to work toward a two-state solution, according to CNN

--This report was updated at 11:30 a.m.