President Donald Trump on Thursday threatened to halt aid to the Palestinians and reproached their leaders for showing a lack of "respect" for US Vice President Mike Pence.

"Respect has to be shown to the US or we're just not going any further," Trump told reporters at the World Economic Forum in Davos, Switzerland.

"They disrespected us a week ago by not allowing our great vice president to see them," said Trump while sitting next to Israeli Prime Minister Benjamin Netanyahu, adding that Washington may withhold "hundreds of millions" more in aid if the Palestinians don't return to the negotiating table.

"That money is on the table and that money's not going to them unless they sit down and negotiate peace," he said.

Last week, the US froze $65 million that it contributes to the regular budget for UNRWA, the United Nations relief agency for Palestinian refugees, and suspended another $45 million in food aid.

Following Trump's recent recognition of Jerusalem as Israel's capital, Palestinian National Authority President Mahmoud Abbas refused to meet with Pence on his recent visit to Israel after earlier in January declaring that the US could no longer be trusted to act as an honest broker in the Israeli-Palestinian talks.

Trump, meanwhile, reiterated his desire for peace in the region and said that eliminating the question of Jerusalem had eliminated one obstacle to achieving it, adding that Israel "will pay" for his concession after coming in for heated criticism for recognizing Jerusalem as the Jewish state's capital without extracting anything in return.

Trump is scheduled to address the World Economic Forum on Friday.