He said Palestine would be "freed" and Palestinian people will be victorious.
Rouhani was speaking at a gathering of officials and dignitaries from Islamic countries, who happened to be meeting in Tehran for events aimed at promoting Muslim unity, marking the anniversary of the birth of prophet Mohammed.
"I have determined that it is time to officially recognize Jerusalem as the capital of Israel", Trump said from White House's Diplomatic Reception Room. "Dear Palestine will at last be liberated without doubt", he added.
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US President Donald Trump is expected to announce on Wednesday that the United States recognises Jerusalem as the capital of Israel and will move its embassy there, breaking with longtime US policy and potentially stirring unrest.
"This is a long overdue step to advance the peace process and to work towards a lasting agreement", Trump argued, saying his announcement is just a "recognition of reality".
Iranian President Hassan Rouhani, also present at the conference, called the U.S. decision to recognise Jerusalem as Israel's capital "a new adventure of global arrogance".
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Given the fact that Jerusalem (al-Quds) is recognized as an occupied land by the United Nations resolutions, the USA move is in stark violation of the global resolutions.
While expressing its solidarity with the Palestinian people, the Islamic Republic of Iran once again emphasizes the important responsibility of the worldwide community, the United Nations in particular, to end the occupation of Palestine and the holy Quds and help the people of that land achieve their fundamental rights.
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The Washington Post has reported that the president dictated the statement Trump Jr. released that day about the meeting. The interview is being held behind closed doors, and Trump Jr. arrived out of sight of cameras through a back entrance.