The Golan Heights are under Israeli occupation and American titles won't change that, a spokesman for Palestinian President Mahmoud Abbas said late on Wednesday.
Nabil Abu Rudeineh criticised the State Department's decision to drop the term "occupied" in its Global Human Rights Report when referring to the Golan Heights, using instead "Israeli-controlled".
"The Palestinian territory occupied since 1967 and the occupied Arab Golan are territories under Israeli occupation in accordance with UN resolutions and international law," said Mr Rudeineh in a statement carried by official Palestinian news agency WAFA.
The US State Department said: "Authorities subjected non-Israeli citizens in Jerusalem and the Israeli-controlled Golan Heights to the same laws as Israeli citizens."
The change, he said, was part of President Donald Trump's plan to "liquidate" the Palestinian cause and "a continuation of the hostile approach of the American administration towards our Palestinian people and … contrary to all UN resolutions".
Many UN resolutions have declared Israel's occupation of Palestinian territories illegal.
Trump is expected to unveil his long-awaited plan for Israeli-Palestinian peace in the coming months, even though the Palestinian leadership has frozen contact with Washington over Trump's 2017 declaration of Jerusalem as Israel's capital. Palestinians believe the coming plan will be blatantly biased in favour of Israel.
"Our Palestinian people led by the Palestine Liberation Organisation and by President Mahmoud Abbas will remain steadfast in adhering to the national constants. Our national project will prevail until we reach our independent Palestinian state with East Jerusalem as its capital," said Mr Rudeineh.
Another semantic change that appeared in last year's report showed up again this year, with a section titled "Israel, Golan Heights, West Bank and Gaza," instead of its previous "Israel and the Occupied Territories" heading.
The US State Department insisted the different wording did not mean a change in policy.
Israel occupied the Golan Heights, West Bank, East Jerusalem and the Gaza Strip in the 1967 Six-Day War.
It later annexed the Golan Heights and East Jerusalem in moves never recognised by the international community.
It has withdrawn from the Gaza Strip, but has fought three wars with Palestinian militants there and maintains a blockade of the territory.
Israel's occupation of the West Bank continues.