"With their decision to recognise Jerusalem as Israel's capital, the United States has become a partner in this bloodshed," Mr Erdogan said at an event in Ankara on Monday.
"The statement by President Trump does not bind us, nor does it bind Jerusalem."
Mr Trump declared that the US would break with decades of established foreign policy and international law last week by recognising Jerusalem as the Israeli capital and relocating its embassy there from Tel Aviv.
While welcomed by Israeli Prime Minister Benjamin Netanyahu, many other world leaders, including US allies such as Turkey, have expressed concern that the controversial move could spark renewed violence in the region and wider Muslim world.
Protests have been held across the globe and four Palestinians killed in violent clashes with Israeli security forces in the West Bank and Gaza.
Israel annexed east Jerusalem in 1967 in a move that has never been recognised internationally. Both Israeli and the Palestinians claim it as their capital.
US Secretary of State Rex Tillerson said on Friday it would still be up to the Israelis and Palestinians to hammer out all other issues surrounding the city in future talks.
A meeting of the Organisation of Islamic Cooperation (OIC) later this week should prove a "turning point" in the crisis, Mr Erdogan added.
The firebrand Turkish leader has been critical of both the US and Israel since last week's announcement.
During a rally in the Turkish city of Sivas on Sunday he called Israel a "child-murderer state".
"We will not abandon [Jerusalem] to an occupier state," he added.
Mr Netanyahu responded that he would not be lectured on morality by a man who "bombs Kurdish villagers in his native Turkey, who jails journalists, who helps Iran go around international sanctions, and who helps terrorists, including in Gaza, kill innocent people".
The Israeli leader is currently in Brussels for talks with EU foreign leaders. He is urging EU member states to follow the US' lead in recognising Jerusalem as Israeli.
On his arrival on Monday he told reporters that Mr Trump's move made peace in the Middle East possible "because recognising reality is the substance of peace, the foundation of peace".
Separately, Russian President Vladimir Putin is due to arrive in Turkey later on Monday for talks on cooperation and the increasing tensions in the Middle East.
He met with Egypt's President Abdel Fattah al-Sisi in Cairo - another key US ally - earlier in the day.
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