The statement comes after U.S. media reported that President Donald Trump may recognise Jerusalem as Israel's capital on Wednesday.
The league, headquartered here, said such move would further fuel instability in the Middle East, which is already battling with numerous conflicts.
"If implemented, it would mark a change in Washington's historical stance that sees the holy city as an occupied Palestinian city and an integral part of the occupied Palestinian lands," Arab League Assistant Secretary General Saeed Abu-Ali said in the statement.
Jerusalem, considered holy by Jews, Muslims and Christians, is a disputed holy city.
Palestine considers it as the capital of their future state while the international community does not recognise Israel's claim on the whole city.
The League of Arab States, or Arab League, has 22 members. Palestine, which the League regards as an independent state, is too a member state. The league strives to strengthen the brotherhood among the member states to achieve a common goal.
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