The United Nations will today vote on a draft resolution urging the US President to reverse his controversial decision.
But a furious Mr Trump vowed to punish states which vote in favour of the resolution by slashing their foreign aid.
Speaking at the White House, he said: “They take hundreds of millions of dollars and even billions of dollars, and then they vote against us.
“Well, we’re watching those votes. Let them vote against us. We’ll save a lot. We don’t care.”
Mr Trump abruptly reversed decades of US policy this month when he recognised Jerusalem as Israel’s capital.
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The move sparked outrage from Palestinians and the Arab world and concern among Washington’s Western allies.
He also plans to move the US embassy to Jerusalem from Tel Aviv.
The draft UN resolution calls on all countries to refrain from establishing diplomatic missions in Jerusalem.
Nikki Haley, Washington’s ambassador to the UN, echoed Mr Trump’s comments, saying the US would be “taking names” at today’s vote.
She wrote on social media: “At the UN, we’re constantly asked to do more and give more – in the past we have.
“So, when we make a decision, at the will of the American people, about where to locate our embassy, we don’t expect those we’ve helped to target us.
“On Thursday, there will be a vote at the UN criticising our choice. And yes, the US will be taking names.”
Israel’s Prime Minister Benjamin Netanyahu described the UN as a “house of lies” ahead of the crunch vote.
He said: “The State of Israel totally rejects this vote, even before the resolution’s approval.
“Jerusalem is our capital and we will continue to build there, and foreign embassies, led by the United States, will move to Jerusalem. It will happen.”
Palestine’s Foreign Minister Riyad al-Maliki and his Turkish counterpart, Mevlut Cavusoglu, both accused the US of intimidation.
He told a joint news press conference in Ankara: “We see that the United States, which was left alone, is now resorting to threats.
“No honourable, dignified country would bow down to this pressure.”
A senior diplomat from a Muslim country added: “States resort to such blatant bullying only when they know they do not have a moral or legal argument to convince others.”
Miroslav Lajcak, president of the General Assembly, said: “It’s the right and responsibility of member states to express their views.”