Mahmoud Abbas addressing the Palestinian National Council.
Abbas, 82, made the comments during a wide-ranging speech, which also drew condemnation from the United States and the European Union.
In a rare public statement on Wednesday, Israel's Holocaust memorial Yad Vashem blasted Abbas' remarks, saying, "Sadly, Abbas has chosen to assault Holocaust remembrance by attempting to convert the Shoah into a propaganda tool, blatantly falsifying history to the point of accusing the Jewish victims as being responsible for their own murder, and transforming Hitler into a Zionist".
U.S. Jewish groups across the political spectrum also lambasted Abbas for his comments.
"The proof of this is that there were Jews [living] in all Arab countries", Abbas said, going on to assert that Jews had lived in the Arab world for some 1,400 years without facing religious persecution. "They say "it is because we are Jews", Abbas told hundreds of delegates in Ramallah.
The German-Palestinian Society, or DPG, in a statement Tuesday said it "dissociates itself clearly and unequivocally" from the remarks by Abbas.More news: Republican Lawmakers Nominate Trump for Nobel Peace Prize
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"Such rhetoric will only play into the hands of those who do not want a two-state solution, which President Abbas has repeatedly advocated".
"For far too long European leaders have given Mahmoud Abbas the benefit of the doubt over his repeated incitement against Israel, the Jewish People and his denial of the Holocaust", Moshe Kantor, the European Jewish Congress president, said in a statement.
Abbas' latest words were widely condemned.
Giving a brief account of the failed peace process between Israel and the Palestinians, the article notes that "Abbas, who oversees a governing system plagued by corruption and dysfunction, has lost support among the Palestinian people". "I write to inform you of the temporary suspension of all formal relations".
He went on to claim that the Holocaust was not the result of anti-Semitism but rather of the Jews' "social behavior, [charging] interest, and financial matters".
The Palestinian leader has a history of Holocaust denial. His 1982 doctoral dissertation was titled "The Other Side: the Secret Relationship Between Nazism and Zionism", and he has in the past been accused of denying the scope of the Holocaust.