Palestinian President Mahmoud Abbas told leaders of Muslim countries on Wednesday that the United States (US) is no longer fit to broker an Israeli-Palestinian peace deal and should be replaced as mediator by the United Nations (UN), outlining a significant policy shift in response to President Donald Trump's recognition of Jerusalem as Israel's capital.

In an impassioned speech at the Organisation of Islamic Cooperation's (OIC) extraordinary summit on Al Quds and Palestine in Istanbul, Abbas said his people would no longer accept the US as a peace broker but added that they remain committed to international resolutions which have formed the basis of the process.

The summit of the 57-member Organisation of Muslim Cooperation concluded with the Istanbul Declaration, outlining the bloc's response to Trump's declaration. It called the decision “null and void” and urged Trump to reconsider the move, which it said was an “unlawful decision that might trigger chaos in the region.”

Abbas said Trump's decision was a "crime" which came at a time when the Palestinians were engaged with Washington in a new push to reach what he said was anticipated to be the "deal of our times."

"Instead we got the slap of our times," Abbas said.

"The United States has chosen to lose its qualification as a mediator... We will no longer accept that it has a role in the political process from now."

The speech marked a significant shift in Abbas' approach toward the US, after years of focusing on courting US goodwill because of Washington's role as sole mediator in the Israeli-Palestinian conflict.

Immediately after Trump's announcement last week, Abbas had said the US effectively disqualified itself as a broker, but Wednesday's speech was more sharply worded and delivered to a global audience.

It was also part of a speech that called on the gathering for specific steps to counter the US decision on Jerusalem.

"We call that the [peace] process in its entirety be transferred to the United Nations," Abbas said.

He also called on countries that believe in the two-state solution to recognise Palestine as a state, and urged Arab and Muslim nations to financially support east Jerusalem.

In his over-an-hour-long speech, Abbas also urged Muslim nations and countries with relations with Israel to take necessary political and economic measures against Israel "to force it to abide by international consensus" to end its occupation of Palestinian territories, including east Jerusalem.

Turkish President Recep Tayyip Erdogan, who hosted the summit, said it is “out of the question” for Washington to continue mediating between Israel and the Palestinians.

“That process is now over,” he said. An earlier draft communique had similarly declared the US role over, but it was not clear if that language was ultimately adopted by the attendees.

Prime Minister Shahid Khaqan Abbasi also met Palestinian President Abbas on the sidelines of the OIC summit in Istanbul.

Last week, Abbas' aides said the Palestinian leader would not meet with Mike Pence during the US vice president's planned visit to Israel and the West Bank next week.

Abbas had initially planned to meet with Pence in the biblical West Bank town of Bethlehem, but two senior aides have said the meeting would not take place because of Trump's pivot on Jerusalem.

Erdogan the current president of the OIC called on countries to urgently recognise the Palestinian state and Jerusalem as its capital. He has been among the most vocal critics of Trump's announcement.

In remarks to the summit, he said Israel is an "occupying state" and a "terror state".

Jerusalem's status is at the core of the decades-long Israeli-Palestinian conflict and Trump's Dec 6 announcement was widely perceived as siding with Israel. It also raised fears of more bloodshed as past crises over Jerusalem had triggered violent outbreaks.

King Abdullah II of Jordan told the gathering that the Trump decision was "grave", threatening the resumption of any peace talks.

Earlier, in opening remarks to a pre-summit meeting, Turkey's foreign minister, Mevlut Cavusoglu, told OIC foreign ministers that the US decision aims to "legitimise Israel's attempt to occupy Jerusalem."

"They expect the Islamic nation to remain silent," he said. "But we will never be silent. This bullying eliminates the possibility of peace and the grounds for shared life. The US' decision is null for us."

Most countries around the world have not recognised Israel's 1967 annexation of east Jerusalem.

Under a long-standing international consensus, the fate of the city is to be determined in negotiations.

Iranian President Hassan Rouhani, Lebanon's President Michel Aoun, and top ministers of numerous nations were also attending the gathering in Istanbul.

The secretary general of OIC called on countries that have not recognised Palestine as a state to do so.

Yousef bin Ahmad Al-Othaimeen told the summit the US decision on Jerusalem is "an exceptional challenge" facing Muslim nations and that it will fan violence in the region, giving extremists an excuse to sow chaos.

In an emergency meeting in Cairo last weekend, Arab League foreign ministers demanded that the US rescind Trump's decision.

In a resolution long on rhetoric but short on concrete actions, the ministers also called for the UN Security Council to adopt a resolution condemning Trump's decision, but acknowledged that Washington would most likely veto it.

Israel has considered Jerusalem its capital since the state's establishment in 1948 and sees the city as the ancient capital of the Jewish people.

In the 1967 Mideast war, Israel captured the city's eastern sector and later annexed it in a move that is not recognised internationally.

The Palestinians equally lay claim to Jerusalem and want the eastern part of the city as capital of their future state.

Some 320,000 Palestinians live in that part of the city and Palestinians claim a deep cultural, historical and religious connection to the city.

The Old City, located in east Jerusalem, is home to sites holy to Jews, Christians and Muslims.

These include the Western Wall, the holiest site where Jews can pray, and the Al Aqsa Mosque, Islam's third holiest site.