Palestinian President Mahmoud Abbas addresses the 73rd session of the United Nations General Assembly, at UN headquarters. Picture: Richard Drew/AP

United Nations - Palestinian President Mahmoud Abbas on Thursday called on the United States to reverse its recognition of Jerusalem as Israel's capital and cuts in aid to the Palestinians, saying these had undermined the two-state solution to the conflict.

"With all of these decisions, this administration has reneged on all previous U.S. commitments, and has undermined the two-state solution," Abbas said in his address to the annual gathering of world leaders at the United Nations.

"I renew my call to President Trump to rescind his decisions and decrees regarding Jerusalem, refugees and settlements."

The last Israeli-Palestinian peace talks collapsed in 2014 and there are doubts U.S. President Donald Trump can secure what he has called the "ultimate deal" since he recognized Jerusalem as Israel's capital in December and moved the U.S. Embassy there in May.

The Palestinians want to establish a state in the West Bank and the Gaza Strip, with East Jerusalem as its capital.

Israel captured those territories in the 1967 Middle East war and annexed East Jerusalem in a move not recognized internationally. Israel regards all of the city as its eternal and indivisible capital.

Trump has equivocated on whether he supports the idea of a two-state solution, with one for the Israelis and one for the Palestinians, a plank of U.S. policy for decades.

On Wednesday, in his administration's clearest support for the idea, he said "I like a two-state solution. That's what I think works best," but later in the day backed off, saying he would also support a one-state solution if both sides wanted it.

Abbas said the United States could no longer be the sole mediator.

"The U.S. acts as a mediator, however now we view the U.S. with new eyes. The U.S. cannot be a mediator single-handedly," Abbas said.

Israeli Defence Minister Avigdor Lieberman criticized Abbas' speech, saying: "Instead of responding to the outstretched hand of Israel and the United States, the only thing that interests (him) is to settle scores and drive the region toward confrontation".

Palestinians are boycotting Washington's peace efforts after Trump broke with long-standing U.S. policy by recognising Jerusalem as Israel's capital and moving the American Embassy to the contested city.

Earlier on Thursday Egyptian President Abdel Fattah al-Sisi called for a resumption of Israel-Palestinian peace talks when he met Israeli Prime Minister Benjamin Netanyahu on the sidelines of the U.N. General Assembly, Sisi's office said.

Netanyahu, who said he was not surprised by Trump's initial comments on the two-state solution, is due to address the assembly later on Thursday.