Haley spoke soon after President Donald Trump insisted that Palestinians had "disrespected" the United States and issued a new threat to cut aid during a meeting with Israeli Prime Minister Benjamin Netanyahu in Davos, Switzerland.
The United States remains "deeply committed" to an Israeli-Palestinian peace deal, Haley said, "but we will not chase after a Palestinian leadership that lacks what is needed to achieve peace."
"To get historic results, we need courageous leaders," she said.
Abbas cancelled a planned meeting with US Vice President Mike Pence to protest the US decision on Jerusalem, which the Palestinians view as the capital of their future state.
Addressing the council, Palestinian Ambassador Riyad Mansour said the search for peace had been Abbas' "life's work" and suggested attacks on the Palestinian leader were a form of "demonization."
Mansour said the Palestinian rejection of the US decision on Jerusalem "is not intended as 'disrespect'" but rather a "position rooted in full respect for the law, for the principles of justice and equity.
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