Israel's foreign ministry on Wednesday accused him of fuelling "religious and nationalist hatred against the Jewish people and Israel."
David Friedman, the US ambassador to Israel, said Abbas had reached a "new low" while President Donald Trump's envoy Jason Greenblatt said "peace cannot be built on this kind of foundation."
The comments came after Abbas, who has faced accusations of anti-Semitism before, suggested in an address to a rare meeting of the Palestinian National Council on Monday night that Jews' relations with banking had led to hostility against them.
"From the 11th century until the Holocaust that took place in Germany, those Jews -- who moved to Western and Eastern Europe -- were subjected to a massacre every 10 to 15 years. But why did this happen? They say 'it is because we are Jews'," he told the hundreds of delegates.
He then cited "three books" written by Jews as evidence that "hostility against Jews is not because of their religion, but rather their social function," adding he meant "their social function related to banks and interest."
He contrasted this with Jews in Arabic countries, who he argued had not faced similar persecution.
Friedman said on Twitter late Tuesday Abbas had "reached a new low in attributing the cause of massacres of Jewish people over the years to their 'social behaviour relating to interest and banks.'"
"To all those who think Israel is the reason that we don't have peace, think again," he added.
Greenblatt said the comments were "very unfortunate, very distressing & terribly disheartening," calling for them to be "unconditionally condemned by all."
Israeli foreign ministry spokesman Emmanuel Nahshon told AFP Abbas's "anti-Semitism" was "all the more shocking considering that he presents himself as wanting to make peace with Israel."
The row comes as relations between the US and the Palestinian leadership have broken down over the controversial American plan to move its Israeli embassy from Tel Aviv to Jerusalem.
The move, which is due to be completed on May 14, sparked major protests by Palestinians, who consider east Jerusalem their capital, and led Abbas to cut off ties with Trump's administration.
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