Palestinian President Mahmoud Abbas told Muslim leaders on Wednesday that a US decision to recognize Jerusalem as Israel's capital was a crime which showed that Washington should no longer play a role in Middle East peace talks.

Addressing an emergency meeting of Muslim leaders in Turkey, Abbas said President Donald Trump was giving Jerusalem away as if it were an American city.

"Jerusalem is and always will be the capital of Palestine," he said, adding Trump's decision was "the greatest crime" and a violation of international law.

Wednesday's summit was hosted by Turkish President Tayyip Erdogan who has bitterly criticized the United States, a NATO ally, for its stance on Jerusalem.

"I invite all countries supporting international law to recognize Jerusalem as the occupied capital of Palestine. We cannot be late any more," Erdogan told leaders and ministers from more than 50 Muslim countries.

He described Trump's decision last week as a reward for Israeli actions including occupation, settlement construction, land seizure and "disproportionate violence and murder."

"Israel is an occupying state (and) Israel is a terror state," he said.

Jerusalem, revered by Jews, Christians and Muslims alike, is home to Islam's third holiest site and has been at the heart of the Israeli-Palestinian conflict for decades. Israel captured Arab East Jerusalem in 1967 and later annexed it in an action not recognized internationally.

Ahead of the meeting, Turkish Foreign Minister Mevlut Cavusoglu said Muslim nations should urge the world to recognize East Jerusalem as the capital of a Palestinian state within its pre-1967 borders.

He said this week Turkey was not seeking sanctions in response to the US move, but wanted the summit to issue a strong rejection of the US decision.

Pro-Palestinian demonstrators shout slogans near the Istanbul Congress Center as the leaders and the representatives of the Organization of Islamic Cooperation in Istanbul, Turkey, Dec. 13, 2017. Credit: Murad Sezer/Reuters

US 'bias'

The Trump administration says it remains committed to reaching peace between Israel and the Palestinians and its decision does not affect Jerusalem's future borders or status.

It says any credible future peace deal will place the Israeli capital in Jerusalem, and ditching old policies is needed to revive a peace process frozen since 2014.

Abbas told the leaders in Istanbul that Washington could no longer be an honest broker.

"It will be unacceptable for it to have a role in the political process any longer since it is biased in favor of Israel," he said. "This is our position and we hope you support us in this."

Trump's declaration has been applauded by Israeli Prime Minister Benjamin Netanyahu, who said Washington had an irreplaceable part to play in the region.

"There is no substitute to the role that the United States plays in leading the peace process," he said at a Hanukkah holiday candle lighting ceremony on Tuesday.

King Abdullah of Jordan, which signed a peace treaty with Israel more than 20 years ago, told the Istanbul summit that he rejected any attempt to change the status quo of Jerusalem and its holy sites.

Abdullah's Hashemite dynasty is custodian of Jerusalem's Muslim sites, making Amman sensitive to any changes in the city.

Iran, locked in a regional rivalry with Saudi Arabia, said the Muslim world should overcome internal problems through dialogue so it could unite against Israel.

Tehran has repeatedly called for the destruction of the Israeli state and backs several militant groups in their fight against it.

"America is only seeking to secure the maximum interests of the Zionists and it has no respect for the legitimate rights of Palestinians," President Hassan Rouhani told the summit.

By Ali Kucukgocmen/Reuters

Additional reporting by Daren Butler and Parisa Hafezi in Istanbul, John Davison and Nadine Awadalla in Cairo and Jeffrey Heller in Jerusalem; Writing by Dominic Evans; Editing by Catherine Evans, William Maclean.