The move comes amid escalating tensions between the Palestinians and the United States since President Donald Trump's Jerusalem declaration.
Speaking in Tehran on Wednesday, Deputy Foreign Minister Abbas Araqchi said the city would remain the Palestinian capital forever, Iran's Fars News Agency reported.
The Executive Committee condemned the allegations made by US Vice President Mike Pence during his speech before the Israeli parliament, the Knesset, last month and called on the US administration to stop the hate speech which denies the historical existence of the Palestinian Arab people in Palestine.
Kuwait's UN Ambassador Mansour al-Otaibi, who holds the council presidency for February, told reporters that it was "important" for the top UN body to "listen to the president himself" during the Middle East debate.
The meeting, held on Thursday under the theme of "Arab move against the USA decision on Jerusalem", called for an worldwide conference on relaunching the peace process within a specific timeframe on the basis of the relevant United Nations resolutions, the land for peace principle and the two-state vision.
Israel claims all of Jerusalem as its united capital, while the Palestinians see the eastern sector as the capital of their future state.
The ministers renewed their rejection of any resolution recognizing Jerusalem as the capital of the Israeli occupation, and considered the transfer of diplomatic missions to it as a violation to the global law and the resolutions of worldwide legitimacy.
Officials say they will "confront" any attempt to change status of the Holy City as Palestinian capital.
The resolution stressed the need to boycott the Israeli occupation and its colonial regime as one of the effective and legitimate means to resist to and end the occupation and save the two-state solution and the peace process. UNRWA's chief, Pierre Krähenbühl, spoke on Thursday during an Arab League meeting of foreign ministers in Cairo. The conferees made a decision to refer the plan to 149th regular meeting of the League's Council due on March 6-7.
On the other hand, the resolution urged the Palestinian factions and forces to speed up the completion of national reconciliation in accordance with the Cairo Agreement signed in May 2011, and to enable the National Reconciliation Government to assume its full responsibilities in the Gaza Strip and hold the general elections as soon as possible.
Just last week, Trump threatened to cut off USA aid to the Palestinians if their leaders don't agree to peace talks with Israel.