Jacob told The News newspaper in Portsmouth the club also want 2.0 million pounds of their TV revenue returned to them.
The transfer embargo was imposed last October when Portsmouth failed to pay debts to a number of clubs following player transfers. However, Portsmouth claim the debts have been paid so the embargo should be lifted.
Portsmouth, facing a winding-up order from the British government's tax office, have demanded a meeting with the Premier League on Tuesday and do not rule out involving the arbitration court to listen to their argument.
"The Premier League are withholding the balance of monies they owe us because they believe that we still owe other football clubs money," Jacob was quoted as saying by The News.
"We have now paid off the three UK clubs. We have agreed with Rennes and Lens to accept certain payments now and then defer a schedule of payments going forward. We are finalising the agreement with Udinese.
"The total amount that we directed the Premier League to discharge and pay these clubs is approximately 5.0 million (pounds). So there is a net balance due to the club approaching 2.0 million. We cannot see how they can keep the money and also continue with the embargo."
Jacob also accused the Premier League of treating Portsmouth as the League's "poor relations and the black sheep of the family" and added: "We have delivered a letter to the Premier League asking to pay back the money.
"We have called for a meeting tomorrow and if this fails or we don't get our money back then we shall exercise the powers of arbitration."
Meanwhile, Portsmouth are waiting for the verdict of their High Court appeal over a 5.5 million pound tax bill. The Court heard the case on Friday.
Richard Scudamore, the Premier League's chief executive said on Sunday the League were sticking by their decisions.
He also denied the League could have done more to help Portsmouth's financial situation.
"There's only a certain point at which we can intervene," he said.
Portsmouth have endured a miserable season on and off the field. They have three owners, changed their manager, have paid their players salaries late three times and are bottom of the table.
