DAVOS, Switzerland — President Donald Trump threatened Thursday to withhold aid money from the Palestinians until they return to peace talks with Israel as he sat down with Israeli Prime Minister Benjamin Netanyahu on the sidelines of an economic summit in Switzerland.
Trump’s decision last year to recognize Jerusalem as Israel’s capital roiled Arab nations and led the Palestinians to refuse to meet with Vice President Mike Pence during his visit to the Mideast this week. They also declared a new U.S.-led peace push dead, saying Washington can no longer be trusted as an honest broker.
Trump said that decision has consequences. The U.S., he said, gives “hundreds of millions of dollars” to the Palestinians, and “that money is on the table and that money’s not going to them unless they sit down and negotiate peace.”
A Palestinian official called Trump’s “language of dictation unacceptable.” Nabil Abu Rdeneh, a spokesman for Palestinian President Mahmoud Abbas, said the Palestinians are “ready to engage in negotiations” and committed to a peace process “based on a Palestinian state with east Jerusalem as capital.”
Trump’s comment came shortly after he arrived at the World Economic Forum, which brings together world leaders, business executives and celebrities. His appearance is aimed at luring foreign investment to the U.S. and highlighting his “America first” economic agenda, despite its seeming odds with a gathering that celebrates global cooperation and free trade.
WATCH: Trump’s America First message dampens mood at Davos summit
It wasn’t immediately clear what money Trump was referring to in his threat. Washington has contributed over $5 billion in economic and security aid to the Palestinians since the mid-1990s. Annual economic aid since 2008 has averaged around $400 million, much of it devoted to development projects.
Also on Thursday, U.S. Ambassador to the United Nations Nikki Haley told the U.N. Security Council that the United States will not “chase after a Palestinian leadership that lacks what is needed to achieve peace.”
Haley criticized a Jan. 14 speech by Palestinian President Mahmoud Abbas at a meeting of the Palestinian Central Council, where he said he would only accept a broad, internationally-backed panel to broker any peace talks with Israel.
“A speech that indulges in outrageous and discredited conspiracy theories is not the speech of a person with the courage and the will to seek peace,” Haley said.
WATCH: Nikki Haley slams Mahmoud Abbas for peddling ‘conspiracy theories’
Last week, the Trump administration moved to withhold some — but not all — of a scheduled aid payment to the United Nations agency that assists Palestinian refugees. The Trump administration said it would provide $60 million, while keeping $65 million until the U.N. body undertakes a “fundamental re-examination.”
Israel has been overjoyed by Trump’s pivot on Jerusalem, which Netanyahu hailed Thursday as an “historic decision that will be forever etched in the hearts of our people.”
During his visit to Israel this week, Pence told Israeli lawmakers that the U.S. was fast-tracking the embassy plans, aiming to move it from Tel Aviv to Jerusalem by the end of 2019. Trump said he anticipates having “a small version” of the embassy open sometime next year.
In his remarks, Trump referenced Pence’s trip to the Middle East, which did not include a meeting with Palestinian leaders. Trump said, “they disrespected us a week ago by not allowing our great vice president to see them,” adding: “Respect has to be shown to the U.S. or we’re just not going any further.”
WATCH: Trump’s late arrival to World Economic Summit creates buzz in Davos
Trump arrived in Zurich ahead of schedule and immediately boarded a U.S. helicopter for the flight to Davos, where the World Economic Forum is being held. The approximately 40-minute trip took Trump over a snowy countryside dotted with houses, frosted mountains and a glistening lake. As Trump got off the helicopter in Davos, he gestured to aides who held him by the arms as he walked across the snowy landing zone to his waiting car.
“We’re very happy to be here,” Trump said as he arrived at the summit site. “The United States is doing very well, and will continue to do well and this will be a very exciting two days.” He said he was bringing a message of “peace and prosperity” to the gathering.
While the president is expected to declare that the United States is open for business, the protectionist-leaning president’s attendance at the annual gathering for free-trade-loving political and business elites has raised eyebrows. His decision to sign new tariffs boosting American manufacturers this week has prompted fresh concerns about his nationalist tendencies.
Trump seemed eager to dispel concerns about his global leadership.
During an earlier meeting Thursday with British Prime Minister Theresa May, Trump insisted their relationship isn’t strained and that the U.S. and U.K. “are very much joined at the hip.”
“We’re on the same wavelength in I think every respect,” Trump said, insisting that they have a “really great relationship, although some people don’t necessarily believe that.”
“We are very much joined at the hip when it comes to the military. We have the same ideas, the same ideals, and there’s nothing that would happen to you that we won’t be there to fight for you,” he told May. “You know that.”
Trump hosted May at the White House days after he took office. But he recently canceled a trip to London to celebrate the opening of the new U.S. Embassy. Trump and May also traded criticism last year over his retweets of a far-right group’s anti-Muslim videos.
WATCH: Pence says U.S. embassy will be built in Jerusalem by 2019
Britain is eager to strike a free-trade deal with the U.S. after it leaves the EU in 2019. U.S. Treasury Secretary Steven Mnuchin said Thursday that U.S. is ready to negotiate an “attractive” trade deal with Britain once that happens.
Trump’s “America First” agenda and aversion to multilateral trade agreements would seem at odds with a global summit that stresses free trade and international cooperation.
But Mnuchin, who is leading the largest U.S. delegation ever to attend the exclusive gathering, said “America First’ means working with the rest of the world.”
“It just means that President Trump is looking out for American workers and American interests, no different than he expects other leaders would look out for their own,” he said.
The president is set to address the forum Friday. He is expected to showcase the booming U.S. economy and measures like his recent tax overhaul, claiming that a thriving America benefits the world. A vocal critic of trade deals he sees as unfair to the U.S., Trump will also stress the need for what he sees as fair competition.
During his two-day stop, the president will also attend a reception in his honor, host European executives for dinner and meet with world leaders, including Rwandan President Paul Kagame.
Associated Press writers Darlene Superville and Jill Colvin contributed to this report. With files from Reuters.