He also suggested a boycott of the greenback as a way to pressure the US, saying that if the US is impoverished "it cannot undertake all these aggressive acts".
Mahathir, the country's longest-serving prime minister for 22 years before he stepped down in late 2003, also defended the Palestinians' right to retaliate against the Israeli blockade of Gaza.
Meanwhile Malaysia is leading the Organisation of Islamic Conference (OIC) in a bid to seek a special session at the UN General Assembly to stop the escalating violence in Gaza.
Abdullah Ahmad Badawi, the Malaysian prime minister, said the Malaysian permanent envoy to the UN will discuss with officials from the 57-member OIC on how best to push for such a session.
"I hope the United States and its allies will not impede efforts to convene the special general assembly," the Bernama national news agency quoted him as saying.
In a separate statement, Abdullah urged the international community not to tolerate Israel's ground offensive which he described as "an act of total war".
The US late on Saturday blocked approval of a UN Security Council statement that called for an immediate ceasefire between Israel and Hamas, and expressed serious concern at the escalation of violence, according to council diplomats.
Israel sent troops and tanks into Gaza on Saturday after a week-long aerial bombardment which has left more than 500 Palestinians dead and thousands more wounded so far.