"The claims in this lawsuit are baseless," Hanan Ashrawi, a leading PLO figure, told a Tuesday press conference convened to respond to the court ruling.
"There is no link between the events mentioned in the case and the decisions of the PLO and PA," said Ashrawi, who testified in the case.
On Monday, a federal jury in the U.S. found both the PA and the Palestine Liberation Organization (PLO) guilty of supporting six attacks in Israel between 2001 and 2004.
The jury ordered the two Palestinian entities to pay $218.5 million to the families of the slain Jews.
The ruling was the result of a lawsuit filed in 2004 under the U.S. Anti-Terrorism Act, which allows American "victims of international terrorism" to seek compensation in domestic courts.
The Palestinian government, however, has said that the U.S. jury overlooked legal precedents indicating that U.S. courts had no jurisdiction over such cases.
It also vowed to appeal the verdict.
"How much should the Palestinians be compensated for the killings and detentions conducted by Israel since the 1967 occupation of Palestinian territories?" Ashrawi asked.
She held Israel responsible for the "chaotic" aftermath of Israel's military incursion into the West Bank in the wake of the Second Intifada.
Ashrawi said the cash-strapped Palestinian government could not afford to pay the fine demanded by the U.S. court.
"The PA can't pay its civil servants because Israel has plundered its tax revenue," Ashrawi said, referring to an Israel decision to confiscate tax revenue collected on behalf of the PA.
The U.S. jury's decision comes as the Palestinian government is suffering an acute financial crisis after Israel in December decided to withhold hundreds of millions of dollars in PA tax revenue.
The Second Intifada, a popular uprising against Israel's decades-long occupation, erupted in September of 2000 following a visit to the Al-Aqsa Mosque by controversial Israeli politician Ariel Sharon.
Thousands of Palestinians and hundreds of Israelis were killed over the course of the roughly five-year-long uprising.