The department says that the PLO "has not taken steps to advance the start of direct and meaningful negotiations with Israel".
Husam Zomlot, the head of the Palestinian delegation to the US, said that they are "not surprised".
"In secular terms we don't recognize any higher authority than the United States constitution", he said. It also contends that the PLO is refusing to engage with the USA government on peace efforts. Dozens of Palestinians were killed in protests that followed the move, and Palestinians have since rejected the U.S.as a peace broker.
And Trump sparked widespread anger in May after moving the US Embassy in Israel from Tel Aviv to Jerusalem.
PLO Executive Committee Member Dr. Hanan Ashrawi called the US policy "blackmail" that "once again seeks to punish the Palestinian people as a whole who are already victims of the ruthless Israeli military occupation".
In its statement, the department says its decision is also consistent with administration and congressional concerns with Palestinian attempts to prompt an investigation of Israel by the International Criminal Court.
Erekat added: "We reiterate that the rights of the Palestinian people are not for sale, that we will not succumb to USA threats and bullying and that we will continue our legitimate struggle for freedom, justice, and independence, including by all political and legal means possible".
The Trump administration has exited three of Obama's signature global-governance achievements: the Trans-Pacific Partnership Agreement, the Paris Agreement, and the Iran deal.
President Donald Trump is closing the Palestine Liberation Organization's mission in Washington, the latest US blow against the Palestinians and an global court during the stalled Mideast peace process. Israel and the Trump administration, have repeatedly demanded that those payments from a so-called "martyrs' fund" be halted because they encourage terrorism.
Under long-standing USA law, permission for the PLO to maintain its mission in Washington must be renewed every six months.
Just last June, Secretary of State Mike Pompeo and Attorney General Jeff Sessions were urged by lawmakers to close the diplomatic outlet, which endorses "flagrant violations" of USA law such as payments to terrorists. "Congress therefore prohibited the PLO, among other things, from establishing or maintaining an office anywhere in the United States".
The Trump administration had threatened to close the mission in November and the head of the Palestinian mission in Washington, Husam Zumlot, had for months been rendered a forlorn figure in the Capitol until he was recalled in December. That led Palestinian President Mahmoud Abbas to break off contact with USA officials for what he called pro-Israel bias, and the opening of the new embassy was met with large Palestinian protests in which dozens were killed.
His foreign minister later asked the ICC chief prosecutor, Fatou Bensouda, to open an investigation into alleged Israeli war crimes, crimes against humanity, and apartheid. The administration has also "redirected" aid meant for the West Bank and Gaza, ended all funding for the United Nations agency on Palestinian refugees and halted funding to east Jerusalem hospitals. -Palestinian relations in the Trump era.
"Practically speaking however, not much will change".
The Palestine Liberation Organization quickly denounced the decision, calling it "the use of cheap blackmail as a political tool". The PLO hasn't cooperated in the talks while pushing prosecution against Jerusalem with the ICC, prompting the order to shutter its offices.
One lesson the Admin should learn from its predecessors is: stong-arming either side to negotiate ending their conflict & make core compromises when they're unprepared has never worked.
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