Speaking at Chatham House think tank in London, he said the plan that US President Donald Trump calls the "deal of the century" was in fact "the consecration of (Palestin') century-old ordeal", the BBC reported on Friday.
No confirmed details have been revealed of the plan, which Washington says could be unveiled in June. Israel has not officially taken a position towards the plan.
Earlier in May, Trump's senior adviser Jared Kushner, who is an architect of the plan, said the proposals will be a "framework... (which) will lead to both sides being much better off".
It is unclear whether the plan will be based on the so-called "two-state solution" a long-standing formula for resolving the conflict by creating a Palestinian state alongside Israel, with Jerusalem a shared capital.
Malki said all the indications were that "this (US) administration is preparing to give its stamp of approval to Israel's colonial policies".
"When it comes to taking the lead on peace efforts, the world left the steering wheel in the hand of a reckless driver... with a view that we should wait till the reckless driver goes over a cliff or runs over the Palestinian people (before doing) something about it," he said.
The Palestin often describe Israeli settlements and other activities in the occupied territories as a form of colonialism, a characterisation that Israel strongly rejects.
Israel has built about 140 settlements, home to more than 600,000 Jews, in the West Bank and East Jerusalem since it occupied them during the 1967 Middle East war.
Palestin claim the territories for a future Palestinian state.
The settlements are considered illegal under international law, though Israel disputes this.
Malki said the Trump administration's plan offered "no independence, no sovereignty, no freedom and no justice - and if (the US) do not think that this situation will have an impact on the future of Israel and the region one way or another, they are the ones that are delusional and not us".
Inferring that acceptance of the Trump plan would be "capitulation", the Foreign Minister said the Palestin would "never be ready to sign a surrender act".
"Our people have not suffered so long or endured so much to simply change the size of their chains," he said.