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The US says it is going to impose sanctions on the Palestinians' self-governance organisation as well as the body that represents it on the international stage.
The sanctions affect both the Palestinian Authority (PA), which was established by the Oslo peace accords, and the Palestine Liberation Organisation (PLO), which was recognised after the same process as the official representative of the Palestinian people in return for its recognising Israel and renouncing violence.
The State Department said it would deny visas to PLO members and PA officials.
The timing and language of the statement suggest it is the Trump administration's response to this week's French-Saudi-led conference at the United Nations, held to rally support for a future two-state solution.
The meeting came as France, the UK and Canada committed to recognising an independent, demilitarised Palestinian state later this year, in some cases subject to certain conditions.
The US castigated these moves, having privately warned of diplomatic consequences if those attending the UN conference made "anti-Israel" declarations.
In its sanctions announcement, the State Department accused the PA and PLO of taking actions to "internationalise its conflict with Israel, such as through the International Criminal Court (ICC) and International Court of Justice (ICJ)".
It also referred to a series of long-standing complaints by the US and Israel that the PLO and PA had continued "to support terrorism, including incitement and glorification of violence (especially in textbooks), and providing payments and benefits in support of terrorism to Palestinian terrorists and their families".
The Trump administration earlier this year lifted sanctions on violent Israeli settlers who have killed Palestinians in the occupied West Bank.
One leading Palestinian politician described the sanctions move as "revenge" by the US for the commitments to recognise Palestinian statehood by a growing number of countries.
The PA appeared to echo that sentiment in a statement released on Thursday.
"These campaigns have been escalating in response to the significant and successive achievements of Palestinian diplomacy," it said.
"Particularly the recent recognitions of the State of Palestine by key countries, the successful United Nations conference in New York, and the historic declaration issued therein."

Mustafa Barghouti, founder of the Palestinian National Initiative (PNI), which is part of the PLO, said the US was targeting the wrong side.
He told the BBC: "Trump's administration, instead of punishing the criminals who are committing war crimes in Gaza and in the West Bank, which is Israel, is instead… punishing the victim, which is the Palestinian people."
Israel welcomed the sanctions and thanked US Secretary of State Marco Rubio for imposing them.
"This important action by [President Trump] and his administration also exposes the moral distortion of certain countries that ran to recognise a virtual Palestinian state while turning a blind eye to its support for terror and incitement," said Foreign Minister Gideon Sa'ar.
The PA has always rejected complaints around "salaries", saying the payments are stipends to the families of all Palestinian prisoners held under Israel's military occupation, many of whom are not given any due process and are held in breach of the Fourth Geneva Convention.
Palestinians see all those detained by Israel and jailed by its military courts, which have a 99 per cent conviction rate, as political prisoners. French officials said last week the PA had expressed its willingness to end these payments in response to France's commitment to recognise a Palestinian state.
This week's UN conference further isolated the US in its support for the way Israel has continued the war in Gaza, which many countries criticised at the meeting.
The conference exposed a strategic vacuum being left by Washington that had traditionally led diplomatic efforts towards a viable longer-term peace between Israelis and Palestinians.
The travel ban on Palestinian officials may be meant as a more limited broadside than a full range of financial sanctions. It is already a complex and lengthy process for PA and PLO officials to obtain visas to travel to the US, requiring special exemptions which are rarely given.
It is not yet clear whether the move would affect any officials working for the Palestinian mission to the United Nations in New York. The current Palestinian ambassador to the UN and his deputy are both US citizens.
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