President Donald Trump's Middle East peace plan is a "monstrous conception" of a Palestinian state that is not going to progress any further, according to a former chief of Saudi intelligence.

The U.S. unveiled its long-awaited peace initiative for an Israeli-Palestinian deal with great fanfare late last month.

The proposal, which Trump delivered standing alongside Israeli Prime Minister Benjamin Netanyahu, would give Israel most of what it has sought during decades of conflict. This includes the disputed city of Jerusalem and recognition of Israeli sovereignty over settlements in the occupied West Bank.

Palestine has rejected the U.S. proposal outright, while Israel strongly supports it.

"What I have seen so far of that deal is that it is trying to make of Palestine what I can call a Frankenstein creation," Saudi Arabia's Prince Turki Al Faisal told CNBC's Hadley Gamble at the Milken Institute MENA Summit in Abu Dhabi on Tuesday.

It is "generally just a monstrous conception of a Palestinian state. It's rightful capital Jerusalem is stripped from it, so that takes away its heart, and its borders are undefined and that takes away its soul."

"So, it is not going to go very far — not only in our part of the world — but the whole world has rejected it," Al Faisal said.

In response, a U.S. administration official told CNBC that Al Faisal was "no longer relevant and his comments are not aligned with the Saudi government."