In a joint statement on Saturday, at the end of a summit of the 57-member Organisation of Islamic Cooperation (OIC) in Mecca, Saudi Arabia, the leaders called on countries that have moved their embassies to Jerusalem to rethink their strategy which they said constituted "a serious violation of international law and international legitimacy".
The OIC urged member countries to take "appropriate measures" against countries that move their embassies to Jerusalem.
US President Donald Trump recognised Jerusalem as Israel's capital in December 2017, breaking with decades of established protocol, and in May 2018 transferred the US embassy from Tel Aviv to Jerusalem.
Guatemala followed suit soon afterwards.
"The Palestinian people have the right to achieve their inalienable national rights, including their right to self-determination and the establishment of an independent and sovereign Palestinian State," the final statement said.
Jerusalem is claimed by both Israelis and Palestinians as their capital and the move by the United States was roundly condemned by Palestinians who said the US could no longer portray itself as a neutral mediator between the two sides.
'Deal of the century'
The OIC's statement comes as Trump's son-in-law Jared Kushner prepares to roll out economic aspects of his long-awaited Middle East peace plan at a conference in Bahrain later this month.
The plan, dubbed the "deal of the century", has already been rejected by the Palestinians, who say Trump's policies have shown him to be blatantly biased in favour of Israel.
Kushner, who was in Jerusalem on Friday on the latest leg of a regional tour to sell the plan, had looked to an alliance with Saudi Arabia against Iran as a way to gain Arab support.
But Saudi King Mohammed bin Salman told leaders of the IOC countries gathered at the summit: "The Palestinian cause is the cornerstone of the works of the Organisation of Islamic Cooperation, and is the focus of our attention until the brotherly Palestinian people get all their legitimate rights.
"We reaffirm our unequivocal rejection of any measures that would prejudice the historical and legal status of Quds [Jerusalem]."
The meeting was the third international summit to be held in Saudi Arabia since Thursday.
The OIC also backed Saudi Arabia over escalating tensions with Iran, as King Salman warned that "terrorist" attacks in the Gulf region could imperil global energy supplies.
The remark came after sabotage attacks damaged four vessels, two of them Saudi oil tankers, off the coast of the United Arab Emirates (UAE) and twin Yemeni rebel drone attacks shut down a key Saudi oil pipeline.
"We confirm that terrorist actions not only target the kingdom and the Gulf region, but also target the safety of navigation and world oil supplies," the king told OIC member states.
Tehran has strongly denied involvement in any of the incidents.
In a tweet just before the start of the summit, the king vowed to confront "aggressive threats and subversive activities".
"Undermining the security of the kingdom effectively undermines the security of the Arab and Islamic world," said OIC Secretary-General Yousef bin Ahmed al-Othaimeen, voicing solidarity that was shared by other members.
Analysts say Riyadh's strategy to counter Tehran is not being helped by divisions within the Gulf Cooperation Council (GCC) countries.
"This strategy from the GCC states is flawed. Flawed because in one sense they don't want to talk to Iran. Iran has asked for a dialogue and they don't want to sit at the table and talk to Iran and sort out all the issues they have with Iran. There are conflicts between the GCC member states. The GCC is not united and it is fragmented," Abdullah Baaboob, a Gulf and Middle East analyst told Al Jazeera.
The OIC summit also urged the US to remove Sudan from its list of state sponsors of "terrorism".