In a Rosh Hashanah conference call with Jewish faith leaders and rabbis, President Trump said he would not give money to Palestinians until they agree to make a peace deal.

"I stopped massive amounts of money that we were paying to the Palestinians and the Palestinian leaders. We were -- the United States was paying them tremendous amounts of money," Mr. Trump said Thursday. "And I'd say, you'll get money, but we're not paying you until we make a deal. If we don't make a deal, we're not paying."

Last week, the Trump administration officially ended funding for a U.N. agency that helps the more than 5 million registered Palestinian refugees -- the State Department announced it would "no longer commit further funding to this irredeemably flawed operation."

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The U.S. has provided nearly 30 percent of the total budget for the United Nations Relief and Works Agency (UNRWA), which provides health care, education and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria and Lebanon. The Trump administration contributed $60 million in January, a massive reduction from the $364 million donated by the U.S. in 2017, and it withheld an additional $65 million in promised aid. "[T]he United States will not make additional contributions to UNRWA" the State Department said.

In his call with Jewish leaders, the president also reiterated an argument he has made for moving the United States Embassy from Tel Aviv to Jerusalem, recognizing it as the capital of Israel—that by removing the status of Jerusalem as a debatable issue, he has advanced the peace process.

"We took it off the table. And I think it's actually going to help a lot in making a deal, as we say, with the Palestinians."

But it was the announcement of the embassy's move that prompted the Palestinian Authority to cut off communication with President Trump's Middle East peace team, including the President's son-in-law Jared Kushner, Special Envoy Jason Greenblatt, and Ambassador to Israel David Friedman. On May 14, the day the new American Embassy in Jerusalem officially opened, Palestinian President Mahmoud Abbas recalled his ambassador to the U.S., Husam Zomlot, to Ramallah, where he has remained.

In an interview with CBS News, Zomlot disagreed with the president that the halted Palestinian aid could be used as leverage for a peace deal. "By weaponizing the U.S. humanitarian and financial aid to Palestine to bully Palestinians to the negotiating table, Trump has undermined U.S. leadership beyond repair…Trying to twist our arm vis-a-vis money is not only amoral, it doesn't work with us."

He also took issue with the president's remark that taking Jerusalem off the table benefits the peace process, retorting, "No one will sit with them if Jerusalem is not squarely on the table. No one." He added that "Trump thinks of Jerusalem as a real estate dealing…Jerusalem is not a real estate property. Jerusalem for us is a national hub and national identity."

There are reports that President Trump is planning to roll out his Middle East peace plan during the UN General Assembly (UNGA) in two weeks' time. But Ambassador Zomlot stresses that "President Trump and his team have lost our trust completely." He argues that the U.S. has "totally co-opted the current Israeli government point of view. Totally. Completely. So what peace plan is he talking about?" Zomlot confirmed that President Abbas will also be attending UNGA, where he will "make an appeal for peace" with the assistance of the international community.

Asked what steps the U.S. could take to convince Palestinians to re-engage in peace talks, Zomlot said, "We don't want steps forward. Whatever they announce now is going to receive a deaf ear given the level of the poison they have inserted in the body of the already dying peace process. The only thing they can do is step backwards, to revert and adopt the long-held historic U.S. position."