Hamas chief Ismail Haniya warned Tuesday that a US decision to move its embassy to Jerusalem and recognise the city as Israel's capital would be a "dangerous escalation" that crosses "every red line".

"The American administration's recognition of occupied Jerusalem as the occupation's capital and moving its embassy to Jerusalem crosses every red line," the head of the Palestinian Islamist movement, which runs the Gaza Strip, said in a letter to Arab and Muslim world leaders.

"Moving the American embassy to Jerusalem is a dangerous escalation and provides cover for the extremist government of (Israeli Prime Minister Benjamin) Netanyahu to carry out its plan to Judaize the city of Jerusalem."

Hamas has previously warned of a third Palestinian intifada, or uprising, over such a move.

In a separate statement Tuesday, Hamas called for Palestinians to "make Friday a day of rage against the occupation, rejecting moving the American embassy to Jerusalem and declaring it the capital of the Zionist entity."

It called on young people in the West Bank to rise up and "respond to the American decision that targets our Jerusalem in every possible way."

Palestinian president Mahmud Abbas warned Donald Trump of the "dangerous consequences of such a decision" in a phone call with the US president on Tuesday, his office said.

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