The United States announced Monday it will shutter the Palestinians' mission in Washington, accusing them of rebuffing peace talks with Israel.
The State Department said the Palestinians had refused to engage with either the United States or Israel and of rejecting outright a still unseen US peace plan.
But an official of the Palestinian Liberation Organization said they were being blackmailed by a White House blatantly biased in favor of Israel and called the move a "dangerous escalation" of tensions in the region.
State Department spokeswoman Heather Nauert said the Washington mission had been allowed to remain open on a special waiver since last November in order to foster work on achieving "a lasting, comprehensive peace between Israelis and the Palestinians."
"However, the PLO has not taken steps to advance the start of direct and meaningful negotiations with Israel," Nauert said in a statement.
She also cited a move by the Palestinians to have Israeli officials prosecuted at the International Criminal Court in The Hague, which the State Department says violates official conditions for the mission's existence.
Nauert denied the US was retreating from peace efforts.
"The United States continues to believe that direct negotiations between the two parties are the only way forward. This action should not be exploited by those who seek to act as spoilers to distract from the imperative of reaching a peace agreement," she said.
- 'Collective punishment' -
It was the latest move by President Donald Trump to push the Palestinians into talks, as his son-in-law Jared Kushner promises a master plan for peace.
In recent weeks, the United States cut more than $200 million in bilateral aid to the Palestinians and canceled its support for the UN agency for Palestinian refugees.
The Palestinians accused the Trump administration of being one-sided.
They cut off contact with the US administration after Trump recognized the disputed city of Jerusalem as Israel's capital in December.
"This is yet another affirmation of the Trump administration's policy to collectively punish the Palestinian people, including by cutting financial support for humanitarian services including health and education," PLO secretary-general Saeb Erekat said in a statement.
Husam Zomlot, head of the PLO mission in Washington, called the closure of the office "bullying and blackmailing" and said the US government was "blindly executing Israel's 'wish list.'"
"The main part of it is just going ahead and implementing the grocery list that was submitted to them by (Israeli Prime Minister Benjamin) Netanyahu."
Both Erekat and Zomlot pledged to push forward with Palestinian efforts at the ICC, where the chief prosecutor has already opened a preliminary probe into the allegations of rights abuses by the Israelis.
Palestinian foreign minister Riyad al-Malki visited the ICC in May and called on it to open an immediate investigation.
The Palestinians have asked the ICC to investigate Israel on issues ranging from settlement building in the occupied West Bank to civilian casualties in the 2014 Gaza war, among others.
- Waiting for 'Kushner plan' -
While Washington demands the Palestinians open peace talks with Israel, the White House has yet to reveal any details of its long-awaited peace plan being authored by Kushner.
Trump's National Security Advisor John Bolton said Monday the "extraordinarily ambitious" plan is still being revised and the administration is seeking an ideal time to reveal it.
"I don't think that the actions we have taken are at all inconsistent with our objective of peace between Israel and the Palestinians," he said.
Palestinian president Mahmoud Abbas agreeing to talk with the Israelis would be "a fine step forward," he added.
Veteran Middle East peace negotiator Aaron David Miller, now Middle East Program Director at the Wilson Center, assailed the US move.
"In 40 years following US policy in and outside government, [I have] never seen any administration simultaneously support Israel so uncritically and go after Palestinians so harshly both without logic, purpose or national security rationale," he said on Twitter.
But Jonathan Schanzer, senior vice president at the conservative think tank Foundation for Defense of Democracies, said pressure to close the mission had been coming from Congress for years.
"The PLO has outlived its usefulness since the creation of the Palestinian Authority. Its leaders have been consistently against compromise," he said.