"We have been officially informed that the United States administration will close our embassy in Washington as a punishment for continuing to work with the International Criminal Court against Israeli war crimes", Palestinian official Saeb Erekat said.
"This is welcome news that President Trump and his administration have taken decisive steps to no longer tolerate the Palestinian anti-Israel propaganda by closing the PLO office in Washington, D.C.", said Mat Staver, Chairman of Liberty Counsel and Chairman of Christians in Defense of Israel.
The US decision also includes warning the International Criminal Court of grave consequences if it heeds Palestinian calls to try Israeli officials for war crimes.
He added that specialized Palestinian teams are now looking into Palestine's accession into 18 global organizations, and holding deliberations to approach the worldwide Court of Justice against the recent USA moves towards Jerusalem and the Palestinian refugees.
The move comes a day after the US closed the Palestinian de facto embassy in Washington because of its leaders' refusal to enter peace talks with Israel.
The decision comes after the Trump administration about $25 million in aid originally allotted for Palestinians in East Jerusalem hospitals.
Erekat said that Palestine's submission to the ICC was over the Israeli high court decision pertaining to the demolition and forcible displacement of the Palestinian community of Al-Khan Al-Ahmar.
Palestinian activists have set up five shipping containers near a Bedouin hamlet to protest the expected razing of the West Bank encampment by Israel, AP reported Tuesday.
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The White House said that to the extent permitted by US law, the Trump administration would ban ICC judges and prosecutors from entering the United States, sanction their funds in the USA financial system and prosecute them in the USA criminal system.
If the move goes ahead it will leave over 170 Palestinians, including 92 children displaced.
PA officials reportedly said they would sever the last vestiges of ties with the USA over the move. Khan al-Ahmar is situated outside Jerusalem between two Israeli settlements.
The PLO office in Washington did not immediately respond to a request for comment."The United States will always stand with our friend and ally, Israel", says Bolton's draft text.
Later, it announced it would not provide assistance funding any more for the United Nations Relief and Works Agency for Palestine Refugees. The U.S. embassy was later moved there from Tel Aviv.
Erekat stressed that the Palestinians are committed to the peace process on the basis of the two-state solution, but will not accept the current USA administration team to be the peace mediator.
Agriculture Minister Uri Ariel (Jewish Home) called the measure a "New Year's gift" to Israel and the Jewish people.