"We express our total rejection of the call to consider Israel as a Jewish state," said the declaration, issued at the end of the two-day meeting in Kuwait City.
The Palestinians recognised Israel at the start of the peace process in the early 1990s, but Israeli Prime Minister Benjamin Netanyahu has insisted they now acknowledge it as the national homeland of the Jewish people, in a move which would effectively torpedo the "right of return" for Palestinian refugees.
US Secretary of State John Kerry is facing an uphill battle to keep peace talks on track beyond an April 29 deadline, with the negotiations waylaid over several key issues, including the question of recognition.
Palestinian president Mahmud Abbas has made it clear that he will never recognise Israel as a Jewish state.
Netanyahu has placed the recognition dispute at the forefront of the talks, describing Arab rejection of the Jewish state as the "root of the conflict".
For the Palestinians, the issue is intimately entwined with the fate of their refugees who were forced out of their homes or fled in 1948 when Israel became a state. They see Netanyahu's demand as a way to sidestep a negotiated solution to the refugee question.
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