Netanyahu is just days away from a national election in Israel.
"This is, at the end of the day, this is the scenario, and this is where they think they can dictate a solution by destroying the concept of two states", said Senior Palestinian official Saeb Erekat.
According to Netanyahu, Likud is not running first in the polls and therefore might not be tasked with forming the next government.
Netanyahu's leading opponent, former armed forces chief Benny Gantz, a leader of the new centrist Blue and White alliance, said the prime minister had crossed an ethical line and was damaging 'our important relationship with U.S. Jews'. Netanyahu's claims that Likud may lose were widely seen as a way to ensure his base of supporters turn out to vote.
At the conclusion of a four-day road trip in Iowa that included 17 town halls, 6 neighborhood house parties, and 5 college campuses, Democratic presidential contender Beto O'Rourke, who last November lost the senate race to Republican Ted Cruz, but came close, chose to go after Prime Minister Benjamin Netanyahu, possibly because Iowa farmers who wake up every morning to milk their cows are asking themselves if Bibi could beat Gantz, and what are the ramifications of the Israeli elections regarding their grain subsidies.
Netanyahu has made last-minute appeals to the right, issuing a deeply controversial pledge to annex settlements in the occupied West Bank. Polls forecast more than 60 out of 120 parliament seats for the Likud and smaller right-wing and ultra-Orthodox Jewish parties. "I am going to extend [Israeli] sovereignty and I don't distinguish between settlement blocs and the isolated settlements". Israel disputes this, citing security needs and biblical, historical and political connections to the land.More news: Nipsey Hussle: Kodak Black Slammed For Disrespecting Lauren London
When asked why he had not already annexed some of the larger settlements, Mr Netanyahu said: "Who says that we won't do it?"
Jerusalem is a critical issue for Palestinians and the USA move is broadly viewed as an attempt to shape the final status issue in favour of Israel.
Erdogan went on to say: "Every action of Israel since 1948 is illegal".
Netanyahu has been buoyed by a close alliance with President Trump but faces looming legal troubles amid allegations that he manipulated the press through shady deals and accepted lavish gifts from his billionaire friends.
The attorney general has announced he intends to indict Netanyahu for bribery, fraud and breach of trust pending an upcoming hearing.
Malki accused the U.S. of encouraging Netanyahu by recognizing Jerusalem as Israel's capital and more recently, recognizing Israel's annexation of the Golan Heights.
Last month, U.S. President Donald Trump recognized the Golan Heights as an Israeli territory, which Israel occupied in 1967.