Palestinian President Mahmoud Abbas attacked US efforts to forge an Israeli-Palestinian peace deal during his UN General Assembly speech, calling Washington a biased mediator and saying that Jerusalem "is not for sale."

"The US acts as a mediator, however now we view the US with new eyes: The US cannot be a single-handed mediator," Abbas said, adding that Trump should rescind his recognition of Jerusalem as Israel's capital among other moves.

Abbas had already rejected an upcoming US peace proposal out of hand and his UN speech did not announce any new steps against the White House.

"It is really ironic that the US administration still talks about what they call the 'deal of the century,'" Abbas said.

Abbas has borne the brunt of Trump's controversial moves, including moving the US embassy to Jerusalem and slashing US aid to the Palestinians.

The Palestinian leader said that he is reviewing agreements that underlie his government's relations with Israel, however, he stopped short of announcing any moves to dissolve the agreements.

Palestinian leaders have long seen Trump's administration as blatantly biased in favour of Israel and seeking to blackmail them into accepting their terms.

"From this august platform, I renew my call to President Trump to rescind his decisions and decrees in order to salvage the prospects for peace and to achieve stability and security for future generations," Abbas said.

Last February, Abbas called for an international conference to re-launch the peace process under a new mediator to replace the United States, in an address to the UN Security Council.

Yesterday, he said there could be no peace without an independent Palestinian state with east Jerusalem as its capital, calling on countries around the world to recognise the state of Palestine.

"We are not against negotiations," the Palestinian leader added. "We will continue to extend our hands for peace."

At the United Nations on Wednesday, Trump pledged to unveil a new Middle East peace plan by the end of the year, turning heads by supporting for the first time a two-state solution to the conflict.

When meeting Israeli Prime Minister Benjamin Netanyahu on the sidelines of the UN General Assembly, Trump said he backed a two-state solution since "that's what I think works best, that's my feeling."

His endorsement of the goal of a Palestinian state, long the focus of US peace efforts before he came into office, was decidedly lukewarm - and he even slightly backtracked from it later in the day.

"If the Israelis and the Palestinians want one state, that's OK with me," he later told a news conference. "If they want two states, that's OK with me. I'm happy if they're happy."

While Trump's comments sparked concern among some Israeli right-wing politicians who hoped he would bury the idea of Palestinian statehood once and for all, Netanyahu had warm words for the US president.

"I looked forward to working with President Trump and his peace deal," said Netanyahu in his speech which was largely devoted to attacking Iran.

He also praised Trump and the American ambassador to the UN, Nikki Haley, for their "uwavering support they have provided Israel" before lashing out at Abbas.

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