The OIC convened in Jeddah on Monday to discuss the plan Trump unveiled alongside Israeli prime minister Benjamin Netanyahu at the White House on Tuesday.
The 57-member organization said it "calls on all member states not to engage with this plan or to cooperate with the US administration in implementing it in any form".
The deal would, among other contentious things, enshrine Jerusalem al-Quds as Israels undivided capital and allow the regime to annex settlements in the occupied West Bank and the Jordan Valley.
All Palestinian groups have angrily rejected the plan, while Israeli groups of different political persuasions have enthusiastically embraced it, hailing it for offering them more than they expected.
Palestinian Authority leader Mahmoud Abbas on Saturday cut relations with the US and Israel after saying he did not want his name to go down in history for betraying the Palestinians.
Riyadh, however, has welcomed the initiative, saying "the Kingdom appreciates the efforts made by President Trumps administration to develop a comprehensive Palestinian-Israeli peace plan".
Saudi government media on Sunday urged the Palestinians not to miss "this opportunity" and to approach the deal with a positive mindset.
State-run newspaper Okaz went on as far as to say that the Palestinian cause is no longer the Arabs main cause.
Saudi Arabia meanwhile barred an Iranian delegation from the OIC meeting in Jeddah, Iran's Foreign Ministry spokesman Abbas Mousavi said.
Iran, he said, has filed a complaint with the OIC and chastised Saudi Arabia for misusing its position as the host for the organization's headquarters.
Iranian officials have condemned Trump's plan as a non-starter after it was officially announced last week. The Palestinian leadership has rejected the plan, saying it heavily favors Israel and will deny them a viable independent state.
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