"The decision of the United States will affect the lives of over 5 million Palestinians in a negative way. At the same time, this decision will harm the vision of finding a two-state solution to the Palestinian issue; regional peace and stability," the ministry said in a statement.
The statement came a day after U.S. State Department spokeswoman Heather Nauert said Washington "will no longer commit further funding" to the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).
The ministry said the U.S. decision was a "major disappointment".
"Under these circumstances, UNRWA's continuing uninterrupted operation has become a legitimacy test and a conscientious task in terms of the international community," it added.
Turkey will discuss the issue in detail during the UN General Assembly High-Level meeting in New York on Sept. 27 with the co-chairmanship of Jordan, Japan, Sweden and the EU, and participation of UN secretary-general and UNRWA general commissioner.
The ministry said Turkey is determined to continue making every effort to support UNRWA and is in solidarity with the Palestinian people.
The U.S. was by far UNRWA's largest funder, giving $350 million annually, or about one-quarter of the agency's budget.
Established in 1949, UNRWA provides critical aid to more than 5 million Palestinian refugees in the Gaza Strip, the Israeli-occupied West Bank, Jordan, Lebanon, and Syria.
Later on Saturday, Turkey's ruling Justice and Development (AK) Party spokesman Ömer Çelik criticized the U.S. decision in a series of tweets, saying it was "the worst decision" and lacks conscience.
Çelik said that the decision would provoke chaos and worsen the situation both in the region and in the world.
"Every step that blocks a fair solution to the Palestine issue affects the whole world. Unfortunately, with this decision the U.S. supports is not the solution, rather discord," he added.
Çelik called on the world to be in solidarity against this "unfair" decision and said "the best answer would be increasing financial aid to UNRWA".
