Palestinians ask court to order US embassy out of Jerusalem
The Palestinians' case asks the court judges "to order the United States of America to withdraw the diplomatic mission from the Holy City of Jerusalem", the Hague-based International Court of Justice said.
Cases at the court can take years to complete. Its decisions are final and legally binding, but are not always adhered to. No date was immediately set for hearings.
The move comes against a backdrop of deeply strained ties between Washington and the Palestinians.
The Palestinian Authority broke off contact with the US after Donald Trump administration decided in December to recognise Jerusalem as Israel's capital and to move its embassy there from Tel Aviv in May.
Trump's announcement triggered a joyous reaction from Israeli Prime Minister Binyamin Netanyahu's nationalist government.
Palestinian President Mahmoud Abbas halted ties with the Trump administration and declared it unfit to remain in its role as the sole mediator in peace talks.
"We will also not accept sole American mediation in the peace process," Abbas said in his address to the UN General Assembly, accusing Trump of being biased towards Israel since taking office in January 2017.
"With all of these decisions, this administration has reneged on all previous US commitments, and even undermined the two-state solution," Abbas said.
The US has also cut more than $200 million in aid to the Palestinians and cancelled its support for the UN agency for Palestinian refugees (UNRWA).
Agencies contributed to this report.