"Saudi Arabia should suspend it bombardment of Yemen and stop begging for contacts with the Zionist regime," he said. "We want Saudi Arabia to stop two things, the misguided friendship with Israel and the inhuman bombardment of Yemen."
Relations between Iran and Saudi Arabia first soured after a deadly human crush during the Hajj rituals in September 2015, when hundreds of Iranian pilgrims among others lost their lives.
Tensions further escalated a few months later following the kingdom's execution of prominent Shia cleric Sheikh Nimr al-Nimr.
Riyadh cut off diplomatic ties with Tehran in January 2016 following angry protests in front of its diplomatic premises in the cities of Tehran and Mashhad against the execution.
Iran not to remain silent on Quds plot
"After regional powers' conspiracy to let terrorist groups dominate the oppressed people in the region was defeated, the Americans today have launched a new plot with the help of the Zionists, which is an aggression on the sacred Quds," Rouhani said.
"We were not, are not and will not be silent in the face of the conspiracies of the big powers, the US, the arrogance and the Zionism ," Rouhani pointed out.
Trump on Wednesday declared that the US was recognizing Jerusalem al-Quds as the "capital" of Israel and had instructed his administration to begin the process of moving the American embassy from Tel Aviv to the ancient city.