The Vatican's lead diplomat on Thursday criticised President Donald Trump's plan for the U.S. to displace Palestinians from Gaza and "take over" the territory, in the second rebuke of a Trump policy by a top Catholic official this week.

Cardinal Pietro Parolin, the Vatican's Secretary of State, said Palestinians must be allowed to remain on their territory. "No deportations, and this is one of the fundamental points," he said at an event in Rome late on Thursday evening.

"Whoever was born and has lived in Gaza must remain on their land," the cardinal said, according to the Vatican's official news outlet.

Parolin reiterated the Vatican's long-standing call for a two-state solution to resolve the Israeli-Palestinian conflict.

The Arab world has voiced fury, and European powers deep concern, over Trump's proposal that Palestinians should be resettled out of Gaza permanently to allow it to be developed as a waterfront resort property under U.S. control.

Turkish President Tayyip Erdogan said earlier on Thursday that the plan posed a major threat to world peace.

Parolin's remarks came two days after Pope Francis also sharply criticised the Trump administration, issuing an unusual open letter to rebuke its recent crackdown on immigrants living in the U.S.

The pope, who last month called Trump's plan to deport millions of migrants a "disgrace", said it was wrong to assume that all undocumented immigrants were criminals.

"What is built on the basis of force, and not on the truth about the equal dignity of every human being, begins badly and will end badly," he said in the open letter.