He is making his case to the U.N. Security Council.
President Donald Trump s December announcement angered the Palestinians, who also consider the city the capital of their future state, and led them to say the U.S. had disqualified itself from its traditional role as lead mediator in talks with Israel.
He said Abbas has refused to meet Israeli Prime Minister Benjamin Netanyahu for 7 1/2 years "to negotiate peace", and he told council members that instead, the Palestinian president has been coming to the United Nations.
"To solve the Palestine question, it is essential to establish a multilateral global mechanism emanating from an worldwide conference", Abbas said.
Washington has lost its legitimacy, Abbas says, after declaring Jerusalem as Israel's capital - and allegedly proposing Abu Dis, now cut off from the holy city by the concrete slabs of Israel's West Bank separation barrier - as an alternative capital of Palestine.
The Palestinian leader said the Trump administration made an "unlawful decision" when they announced the move and called for a "multi-lateral worldwide mechanism" to solve the Israeli-Palestinian conflict.
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Ambassador Danny Danon addressed the U.N. Security Council immediately after Abbas on Tuesday, but the Palestinian leader left the chamber as soon as he finished, and Danon accused him of "once again running away".
"Mr. Abbas, you have made it clear with your words and with your actions that you are no longer part of the solution".
A spokesperson for the Conference of Presidents said the remarks had been distorted and the USA embassy said that the remarks do not indicate that the Trump administration is no longer committed to putting together a peace plan. The law comes ten years after Israel's Supreme Court repealed a decision to strip four East Jerusalem Palestinians of their residency.
Haley was accompanied to the council meeting by Jason Greenblatt, the United States envoy for Middle East peace and Jared Kushner, Trump's son-in law and adviser on Israeli-Palestinian peace efforts.
She noted that Trump negotiators Kushner and Greenblatt were sitting behind her "ready to talk". "The choice, Mister President, is yours".
Earlier this month, Trump also declined to give a timeline for releasing the United States plan for peace between the Israelis and the Palestinians, telling an Israeli newspaper that he is not convinced that either party is committed to the process.
Tillerson also said that the Trump administration's Middle East peace plan is "fairly well advanced" after several months of work, though he offered no details on when the proposal might be unveiled or what it might contain. "The worldwide community not only to declare support for a Peace Process but to establish a concrete mechanism of implementation and accountability".
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Despite the worldwide pressure to reconcile with Israel, Abbas "can't live with that approach", he said.
United Nations envoy Nickolay Mladenov said the global community must continue advocating for "substantial Israeli policy changes" on settlements and stressed that "these are not negotiations between equals".
Abbas, Erekat said by way of defense, has "led the peace process and promoted the principle of the two-state solution".
During his speech, Abbas is expected to reiterate the need to implement the UNSC Resolution calling for a two-state solution, the London-based A-Sharq Al-Awsat reported.
He also called conditions in Hamas-rule Gaza "dire" and mentioned the shortage of funds for the United Nations agency for Palestinian refugees, caused by the US suspension of $65 million in assistance.
Palestine now has non-member observer status at the UN, but would need a UN Security Council vote to be upgraded to full membership.
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