Qurie - who also unilaterally announced that he was back in the prime ministerial role that he had to renounce as a condition of standing - said he thought that the polls on 25 January should be postponed because of the Jerusalem issue.
"It is the main issue. We must not go to elections without Jerusalem," he told a news conference.
Control of Jerusalem is one of the central disputes in the Israeli-Palestinian conflict.
However, Qurie was earlier quoted as saying that he was pulling out of the race because he opposed a decision to merge two rival lists of candidates from the ruling Fatah movement.
The governing body of the ruling Fatah movement had on Thursday decided to merge the rival lists of candidates submitted by the old guard and the youth wing of the movement as a compromise formula.
The decision to have a common list would require senior leaders, including Qurie, to contest district polls before they could be considered for the final list. As a veteran leader, Qurie had expected to be at the top of the list without running the whole gauntlet.
"It [the ban on voting in Jerusalem] is the main issue. We must not go to elections without Jerusalem"
Palestinian prime minister
Also, a re-election is not guaranteed at the district level voting and party officials believe that Qurie, who was placed near the top of Fatah's original list of candidates, will have a difficult time winning his local district.
Israel bans voting
Meanwhile, an official at the Israeli prime minister's office said on Wednesday that voting would not be allowed to take place in any form in east Jerusalem on 25 January.
The Palestinians claim predominantly Arab east Jerusalem as the capital of a future state. Israel, which captured east Jerusalem in the 1967 Mideast war, says the entire city is its eternal capital.
Israel had allowed Arabs in east Jerusalem to participate in previous Palestinian elections. But it is threatening to ban voting in the next if the Palestinian Authority does not prevent the Islamic group Hamas from running.
Hamas, which has killed hundreds of Israelis in bombings and remains committed to Israel's destruction, appears poised to make a strong showing against the ruling Fatah party in the election.
Arab League slams Israel
While the deadline has passed for parties to submit their candidate lists, a Palestinian court is expected to issue a ruling in the next day or two that would reopen the registration process and clear the way for Fatah to unify its list of candidates.
The Arab League condemned
Israel's ban on voting
Meanwhile, the Arab League on Saturday condemned Israel's refusal to allow next month's Palestinian elections in occupied east Jerusalem as a move aimed at pre-empting the final status of the disputed city.
"The Arab League secretary-general points out the danger inherent to these Israeli measures and argues that Jerusalem's final status should conform to international resolutions and be determined within an effective peace process," a statement said.
The statement issued by the Cairo-based pan-Arab organisation also described the elections ban as "another Israeli attempt to influence the fate of Jerusalem".