The Palestinian Authority foreign ministry said Thursday it would file a complaint at the United Nations
against Honduras, after the Central American state recognized Jerusalem as Israel's capital.
US President Donald Trump recognized Jerusalem as capital of the Jewish state in December 2017.
Both Washington and Israel have since encouraged other countries to take similar steps.
So far only Guatemala and Paraguay have transferred their embassies, and Paraguay later reversed its decision.
On Tuesday, Honduran President Juan Orlando Hernandez announced that his country would open a diplomatic office in Jerusalem.
The mission will be an extension of Honduras' Tel Aviv-based embassy, but Hernandez said Tuesday it was "recognition that Jerusalem is the capital of Israel."
In a statement Thursday, the PA foreign ministry confirmed it would submit a formal complaint against Honduras to the UN Secretary General Antonio Guterres.
It called the decision a "direct aggression" against the Palestinian Arab people and a "blatant violation of international law and legitimacy."
In a statement, senior PA official Hanan Ashrawi said the leadership would "reassess its relationship with Honduras".
"The status of Jerusalem as an occupied city is endorsed by the vast majority of states, in line with their standing legal and moral obligations to uphold international law," she added.
Hernandez is expected to visit Israel and open the new mission in the coming days.
Ashrawi also condemned the tiny Pacific Ocean island state of Nauru, which recently recognized Jerusalem as Israel's capital.