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The International Court of Justice (ICJ) said Friday that it has received a complaint from Palestine against the United States.
They argued that President Trump's decision to move the US Embassy from Tel Aviv to Jerusalem in May violated an international treaty and needed to be revoked.
The ICJ noted that Palestine has drawn attention to the 1961 Vienna Convention on Diplomatic Relations, which obliges a country to set up its embassy on the territory of a host state and that Israel controls Jerusalem and that its property is disputed.
The Palestinians asked the court "to order the United States of America to withdraw their diplomatic mission from the holy city of Jerusalem".
The official statement said: "The State of Palestine has initiated a lawsuit against the United States of America before the International Court of Justice (ICJ), the principal judicial organ of the United Nations, in the event of a dispute over violations of the law. Vienna Convention on Diplomatic Relations of 18 April 1961. "
The legal battle, announced by the Hague-based ICJ, comes amid a series of persistent tensions between Washington and Palestine after Trump recognized Jerusalem as Israel's capital in December.
Palestinian President Mahmoud Abbas suspended his relations with the Trump administration following the announcement and declared the United States unfit to remain the sole mediator in the peace talks.
The Palestinian leader said Trump had been "biased" towards Israel since his election.
He said: "We will not accept either the single American mediation in the peace process".
The Republican Republican is trying to get the "agreement of the century" between Israelis and Palestinians and brings both parties back to the negotiating table.
The last Israeli-Palestinian peace talks collapsed in 2014, but Trump said he could get "the ultimate deal" after delegating the gigantic task to his step-son, Jared Kushner.
Despite President Abbas's anger, Trump's decision triggered an enthusiastic response from the nationalist government of Israeli Prime Minister Benjamin Netanyahu.
The ICJ is the United Nations forum for the settlement of disputes between nations.
Court cases can take years to resolve.
Court decisions are final and legally binding, however, they are not always respected.
No dates have been set for the hearings.
