Mike Huckabee, who was appointed to the ambassadorial role by President Donald Trump in April, said the US was taken aback by the federal government's announcement on Monday.
"There is an enormous level of disappointment and some disgust," he told ABC's 7.30 program on Thursday night.
Mr Huckabee criticised the timing of the statehood announcement.
"What Australia and the other countries may have done inadvertently is to push Israel towards doing exactly what they're afraid of," he said.
"The result of this has been to completely halt any type of thoughtful negotiations going forward."
Prime Minister Anthony Albanese will formally recognise Palestine at a United Nations General Assembly meeting in New York in September.
Australia's decision comes after other western allies - the UK, France and Canada - unveiled plans to recognise statehood at the summit, with certain conditions.
The goal is to end the cycle of violence in Gaza sparked when the designated terrorist group Hamas attacked southern Israel on October 7, 2023, killing 1200 people and taking about 250 hostage.
Federal minister Mark Butler sought to downplay the ambassador's comments.
"At the end of the day, this is the ambassador to Israel - his job is to manage the relationship between America and Israel," he told Seven's Sunrise program on Friday.
"We are convinced this is the right decision at the right time to help build momentum to break this cycle of violence."
While Mr Huckabee said the US got "no heads up" about Australia's decision, Foreign Minister Penny Wong did inform US Secretary of State Marco Rubio ahead of it being made public.
Mr Butler denied the US was not informed.
"There is a readout from the State Department about that conversation," Mr Butler said.
"We're convinced we've made the right decision.Â
"It wasn't one taken lightly. It was one taken after weeks and weeks of consideration."
Liberal senator Jane Hume said Americans on both sides of politics had been shocked by the decision on statehood.
"This decision by the Labor government has bewildered the Americans, that (the government) essentially departed from years of a strong alliance between Israel and America and Australia to make this decision unilaterally," she told Seven's Sunrise.
"This is going to set back the peace process by weeks, potentially months, maybe even years."
Israel's war on Hamas in Gaza has killed almost 62,000 Palestinians, including 18,000 children, according to local health authorities.
The UN projects 2.1 million people in Gaza are facing high levels of acute food insecurity, while 470,000 are facing catastrophic levels of food insecurity.
Hamas has still not released all of the Israeli hostages.
Mr Albanese has said Australia's recognition is tied to a commitment that Hamas play no role in a future Palestinian state.
Almost 150 out of the 193 UN member states have already recognised the state of Palestine, including EU countries Spain and Ireland.
The coalition has pledged to reverse Australia's position if it wins the next election.
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