Trump's son-in-law and Middle East peace envoy Jared Kushner told the Saban Forum on Sunday the president is close to a decision on whether to recognise Jerusalem as Israel's capital.
"It is unfortunate that some are insisting on carrying out this step without any regard to the dangers it carries to the stability of the Middle East and the whole world," Ahmed Abul Gheit, head of the Arab League, told reporters in Cairo on Sunday.
Abul Gheit said the Arab League is closely following the issue and is in contact with the Palestinian authorities and Arab states to coordinate the Arab position if Trump takes the step.
Trump must decide on Monday whether to sign a legal waiver that would delay plans to move the US embassy from Tel Aviv to Jerusalem for another six months.
Every US president has done this since 1995, judging the time not ripe for such a move, and Trump is expected to begrudgingly do so for a second time this week.
But, according to diplomats and observers, he is also now expected to announce in a speech on Wednesday that he supports Israel's claim on Jerusalem as its capital.
Palestinian leaders are lobbying desperately against such a move, fearing it could provoke such fury in the Arab world it could sink peace hopes for a generation.
"Nothing justifies this act... it will not serve peace or stability, instead it will nourish fanaticism and violence," said Abul Gheit.
The move would "benefit only one side, which is the anti-peace Israeli government," he told reporters.
Israel occupied east Jerusalem and the West Bank in 1967. It later annexed east Jerusalem in a move never recognised by the international community.
The Palestinians see the eastern sector as the capital of their future state.
The traditional United States position is that the status of Jerusalem must be negotiated between the two sides.
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