Palestine slams US amid rumours Netanyahu is seeking Trump's backing to annex Israeli settlements
Presidential spokesperson Nabil Abu Rudeineh reiterated the Palestinian position that any decision which affects Palestinian statehood, and is contrary to international law, shall be considered illegitimate.
His remarks, reported by Wafa, come amid media reports that Netanyahu is seeking a public declaration from US President Donald Trump recognising Israeli sovereignty over parts of the occupied West Bank.
Rudeineh warned that such a move would have "serious implications".
"This step, if taken, would constitute ongoing playing with fire," he added.
The Times of Israel revealed Sunday that Netanyahu is seeking a declaration from Trump ahead of September elections.
Officials in the Prime Minister's Office told the Israeli newspaper that although Netanyahu could not take such a step, he is seeking support from Trump for the move.
President Trump has backed Israel on a number of occasions since he took office.
The US president broke with decades of international consensus by recognising the contested city of Jerusalem as the capital of Israel.
He has also cut hundreds of millions of dollars in aid for Palestinians and shut their de facto embassy in Washington.
The Palestine Brief: Demolitions in Negev and the forgotten plight of Palestinian Bedouins
His administration is due to release a peace plan for the region. The economic aspect of the plan has already been released and was rejected by the Palestinians.
The Palestinian leadership has boycotted Trump and accused him of using promises of cash to try to impose political solutions whilst ignoring Israel's occupation of Palestinian territories.
Agencies contributed to this report.