President Mahmoud Abbas on Sunday confirmed that Palestinians are being offered Abu Dis as the capital of a future Palestinian state.
Abu Dis is a Palestinian town on the outskirts of Jerusalem, where Al-Quds University, one of the largest Palestinian universities, is located.
The Jerusalem Post quoted Abbas, as saying that "What would you want if Jerusalem were to be lost? Would you want to make a state with Abu Dis as its capital?" Abbas stated rhetorically. "That's what they are offering us now. Abu Dis."
The Palestinian president did not mention, whose plan is to make Abu Dis as the capital of a future Palestinian state.
However, several Palestinian and Lebanese officials, have reportedly said that a forthcoming United States peace plan includes Abu Dis as the capital of a future Palestinian state.
Abbas said "no" to US President Donald Trump's peace plan.
"We can say no to anyone... And we have now said 'no' to Trump and others. No, we will not accept his plan," Abbas said. "We told him that the deal of the era is the slap of the era... We will repeal it," he added.
Protests and violence erupted in the West Bank, East Jerusalem and Gaza Strip after US President Donald Trump, last month, announced the relocation of its embassy from Tel Aviv to Jerusalem.
Since then, Israeli forces have killed 12 Palestinians. Unofficial figures of casualties vary between 30 to 40. At least 2,900 others have been injured and more than 400 arrested so far.
On Christmas eve, Israel also sealed-off the entrance to the West Bank cities of Ramallah and al-Bireh until further notice.
Palestinian President Mahmoud Abbas has also rejected the American peace efforts and called on the European Union (EU) to take the lead in the Israel-Palestine peace process.
Jerusalem is considered as a sacred place and is home to Jewish, Christian and Muslim holy sites. However, it is also a disputed territory, contested by both Israel and Palestine, which sees it as the capital of its future state.