In rambling remarks that were part of a lengthy speech to the PLO parliament on Monday, Palestinian President Mahmoud Abbas said it was the Jews' "social function," including money-lending, that caused animosity toward them in Europe, citing what he said were books by Jewish authors.
He also portrayed the creation of Israel as a European colonial project, saying "history tells us there is no basis for the Jewish homeland".
On Wednesday, the US ambassador to Israel, as well as Israel's prime minister, lashed out at Abbas over his remarks.
"Abu Mazen has reached a new low," Ambassador David Friedman tweeted , referring to Abbas by his nickname.
"To all those who think Israel is the reason that we don't have peace, think again."
US President Donald Trump's special envoy for international negotiations Jason Greenblatt also responded to the remarks, calling them "very distressing and terribly disheartening."
The rhetoric reflects the escalating tensions between the Palestinians and the Trump administration.
Ties have been strained since Trump recognised Jerusalem as Israel's capital last year, prompting the Palestinians to suspend contacts with the administration. Friedman and Abbas have sparred before. In March, Abbas called Friedman a "son of a dog" in an angry rant. Friedman suggested the remark was anti-Semitic.
In a statement, Israeli Prime Minister Benjamin Netanyahu said the remarks were "the pinnacle of ignorance" and that the Palestinian leader was "again reciting the most disgraceful anti-Semitic slogan".
Abbas' office declined to comment.
