"Instead of a delusional 'Deal of the Century' - which will be D.O.A.- self-described 'champions of democracy' would do better to accept Iran's democratic solution," Xinhua news agency reported citing Zarif as saying in a tweet.
Zarif's tweet comes after Trump announced on Monday that he will unveil his plan on Tuesday, more than two years after his advisers started drafting the it.
He made the announcement while welcoming Israeli Prime Minister Benjamin Netanyahu to the White House.
Trump provided details of the peace plan to the two main rivals in Israel's March 2 general election: Netanyahu and centrist leader Benny Gantz, who met separately with the US President on Monday in the Oval Office, reports Efe news.
But the plan was bound to be roundly rejected by Palestinian authorities, who are staunchly opposed to any role by Washington as mediator.
Palestinian leaders have not had any contact with the US since Trump announced the Washington's recognition of Jerusalem as Israel's capital in 2017.
According to local media, the President of the Palestinian National Authority, Mahmoud Abbas, refused to speak with Trump on Monday over the phone about the peace plan.
Abbas warned Israel and the US last week not to cross any "red lines", saying that if the plan is unacceptable he will announce a series of measures to safeguard the Palestinian people's "legitimate rights".
Trump, for his part, said on Monday that he expected Palestinian leaders would reject his administration's plan initially but eventually support a deal that is "overly good to them".
Although the White House has not yet confirmed any details of the plan, one of its architects, Trump's son-in-law and senior adviser, Jared Kushner, said a year ago that it would contain proposals on some of the thorniest issues in the decades-long Palestinian-Israel conflict, including the establishment of borders.
According to official Israel sources cited by media in that country, the plan would set aside for Israeli annexation a large chunk of the occupied West Bank, including major settlement blocks and the strategically important Jordan Valley.
The last round of peace talks between Israelis and Palestin broke down in 2014 amid the former's expansion of the settlements in the West Bank.
Israel seized the West Bank, Gaza Strip, and East Jerusalem in the 1967 Middle East War and has since controlled or blockaded them despite international criticism.
( With inputs from IANS )