What’s new? Israel is advancing new policies to entrench its de facto annexation of most of occupied East Jerusalem. Moreover, depending on what coalition government emerges from forthcoming parliamentary elections, it could shunt the city’s Palestinian areas lying east of the separation barrier into disconnected Israeli administrative units outside the municipality’s jurisdiction.

Why did it happen? Israeli decision-makers are concerned that Jerusalem will soon have a non-Jewish majority. The Netanyahu government has conceded that its neglect of East Jerusalem has failed to induce Palestinians to leave. Instead, neglect has bred crime and violence, and created numerous lawless areas, particularly east of the barrier.

Why does it matter? Israel’s plans – removing from the municipality certain Palestinian areas outside the barrier, cataloguing all occupied East Jerusalem lands in the Israel Lands Registry and inducing Palestinian schools in East Jerusalem to adopt Israeli curricula – would exacerbate the conflict in and over Jerusalem.

What should be done? Palestinians, Israelis and allies of both leaderships should press the Israeli government not to carry out these plans. If it wants to reduce poverty and crime in East Jerusalem, Israel should allow Palestinians to establish civic leadership bodies in the city and end its ban on Palestinian Authority activities there.

Israel is advancing new policies to entrench its de facto annexation of parts of occupied East Jerusalem. In 1967, Israel occupied East Jerusalem but never fully applied Israeli laws: land registration was partial, most Palestinian schools do not use Israel’s curriculum and East Jerusalemites have residency, not citizenship. In May 2018, with the stated aim of reducing socio-economic inequality, Israel adopted a five-year plan allocating $530 million to East Jerusalem. But the plan’s real goal is to assert Israeli sovereignty, including, most dangerously, by cataloguing all East Jerusalem’s lands in the Israel Land Registry and inducing its schools to use Israeli curricula. In parallel, to protect Jerusalem’s Jewish majority, Israeli leaders are thinking about redrawing the Israeli-demarcated municipal boundaries in order to remove Palestinian-populated areas that lie within these boundaries but to the east of the separation barrier. This “excision” scheme, along with the land registry and curricular initiatives, risks deepening conflict in Jerusalem. Whatever government Israel forms after the 17 September 2019 election should not carry out these plans.

For 50 years, the state has tried to attract more Jews to East Jerusalem and to prod Palestinians to leave. Israel’s national leaders increasingly recognise that this policy has failed to secure a lasting Jewish majority: too few Jews have moved in, and many continue to leave, while too few Palestinians have departed. If current demographic trends persist, Jerusalem could become a minority-Jewish city as early as 2045.

Unable to have all of East Jerusalem without most of its Palestinian inhabitants – and buoyed by support from the Trump administration, international neglect of the Palestinian issue and growing Israeli cooperation with Arab states – Israel is phasing in a plan that would consolidate Israel’s rule over East Jerusalem territory west of the separation barrier. (The separation barrier is a physical divide erected during the 2000-2005 intifada with the security aim of preventing West Bank assailants from entering Israel and the political aim of establishing that in any future solution, Israel would annex many Jewish settlements, including those in and around East Jerusalem, even as a large number of East Jerusalem’s Palestinian residents end up on the other side of the border.)

In East Jerusalem and its vicinity, the barrier mostly separates Jewish settlements from Palestinian communities, East Jerusalem from the West Bank and Palestinian areas from one another. In order to increase the proportion of Jews in Jerusalem and prevent the loss of a Jewish majority in the city, a number of Israeli leaders across the political spectrum advocate excising Palestinian-inhabited areas of East Jerusalem east of the barrier from the municipality, turning them into separate Israeli regional councils. The most widely supported excision proposal would leave Palestinians with status as residents of Israel in excised areas (there are also Palestinian citizens of Israel in these areas). Palestinians fear that this step would be the prelude to revocation of their residency – without which they cannot enter East Jerusalem or Israel. Other excision proposals call for rescinding the residency status of excised areas’ inhabitants.

Excising Palestinian-inhabited areas in order to forestall the loss of a Jewish demographic majority in the city could set a dangerous precedent, offering a model for how Israel could annex large parts of the West Bank while shunting Palestinian residents into separate Israeli administrative units, where they might have residency but not citizenship. Excision would also deepen poverty, chaos and militancy in the most forsaken corners of the city. An excision plan could go into effect shortly after a new coalition government takes its seats following the 17 September Knesset election, depending on its composition.

Israeli political parties, from both the coalition and the opposition, that seek to preserve stability and minimise the risk of escalation should block any excision of Palestinian areas, press their government to discard the most inflammatory components (East Jerusalem land registration and Palestinian adoption of Israeli curricula) of its five-year plan and loosen Israel’s ban on Palestinian Authority activities east of the barrier in areas that Israel has refused to govern. The international community, and in particular the EU and Arab states, should warn Israel of these schemes’ possible repercussions and signal that excision would bring Europe closer to recognising a Palestinian state with East Jerusalem as its capital.

Outside powers also should allocate funds to help Palestinian Jerusalemites establish civic leadership bodies in East Jerusalem to operate both east and west of the separation barrier, in coordination with Israel. Indeed, Israel, too, should have an interest in having such a leadership, which can help reduce crime that spills over into West Jerusalem, provide services that could begin to correct for decades of neglect and create a mechanism for addressing conflict in East Jerusalem.

Jerusalem/Brussels, 12 June 2019

The stakes in Jerusalem are high. For Israeli Jews the city’s name, Yerushalayim (Abode of Peace), evokes the biblical seat of Jewish kings and the site of ancient Jewish temples. Virtually all members of the current governing coalition – in line with the majority of the Jewish public – agree on three fundamental policy principles: that Jerusalem should be Israel’s capital, that the capital must include parts of occupied East Jerusalem, including the Old City and its immediate environs, and that it ought to have a Jewish majority.^[fn]Crisis Group interviews, members of Knesset (MKs) for Jewish Home, Likud, Shas, United Torah Judaism, Israel Beitenu and Kulanu parties, Jerusalem, February-August 2018.Hide Footnote This consensus stands because most Israeli Jews view the modern city in continuity with the biblical city – return to which Jews across the world have prayed for two millennia.

For Palestinians, the city of al-Quds (the Holy) also lies at the core of national and religious identities and shapes political objectives. Palestinians point to their historical role as defenders of al-Aqsa mosque, located in the occupied Old City. Palestine Liberation Organisation (PLO) leaders assert that a Palestinian state without a capital in East Jerusalem is “worthless”.^[fn]Crisis Group interviews, PLO Executive Committee member, Ramallah, March 2018; PLO Planning Unit official, Jerusalem, April 2018; PLO ambassador, Jerusalem, June 2018.Hide Footnote

The modern diplomatic history of the conflict over Jerusalem began with UN General Assembly Resolution 181 (November 1947), which called for the partition of Mandatory Palestine into two states (one Arab, one Jewish, with equal rights for minorities in each state) and specified that the Jerusalem area – the Jerusalem municipality and several surrounding towns, including Bethlehem – would comprise a corpus separatum under a Special International Regime.^[fn]See “Resolution 181 (II). Future Government of Palestine”, UN General Assembly, 29 November 1947.Hide Footnote

By the end of the 1948 war, Israel had expanded its boundaries well beyond those of the 1947 partition plan into the corpus separatum, including the western half of Jerusalem. Jordan, which took control of the West Bank, declared a second capital (after Amman) in East Jerusalem, over an area of 6 sq km, which included the entirety of the Old City and most of its holy sites. In 1950, Israel’s parliament, the Knesset, declared a capital in the part of Jerusalem under its control. Israel built most of its governing institutions there. The UN and the international community rejected both Israel’s and Jordan’s unilateral declarations and remained committed to the idea of a Special International Regime for Jerusalem.

Following the 1967 war, Israel occupied the West Bank and unilaterally expanded the city’s municipal boundary to encompass the formerly Jordanian-ruled areas (6 sq km) as well as an additional 70 sq km that included dozens of surrounding West Bank villages. In so doing, Israeli leaders weighed several factors: security considerations, preserving land for future development, historical and religious attachments, and bringing into the city “maximum territory and minimum population”.^[fn]Amnon Ramon, “Residents, Not Citizens: Israel and the Arabs of East Jerusalem, 1967-2017”, Jerusalem Institute for Policy Research, 2017 (Hebrew).Hide Footnote In 1980, the Knesset passed a Basic Law declaring that “Jerusalem, complete and united, is the capital of Israel”. The Oslo Accords of the 1990s defined Jerusalem as a final status issue, leaving it under Israeli rule during what was supposed to have been an interim period. During final status negotiations in 2000, Israeli and Palestinian leaders discussed partitioning the city, yet the talks collapsed over several issues, notably disagreement about sovereignty over the Haram al-Sharif/Temple Mount.^[fn]A small plaza (5 sq km) in Jerusalem’s Old City, the Holy Esplanade is Judaism’s holiest site and of great significance in Islam. In Jewish tradition, it contains the foundation stone of the world’s creation, on which Abraham nearly sacrificed his son Isaac; it is where the First and Second Jewish Temples (destroyed in 586 BCE and 70 CE, respectively) stood. The only remnant of the ancient compound is the esplanade’s western retaining wall, known in Judaism as the Kotel, the Western Wall. In the Islamic tradition, al-Aqsa (The Farthest) mosque was Muhammad’s destination on his night journey from Mecca on his winged horse, al-Buraq (Lightning) – as Muslims call the wall that Jews refer to as the Kotel. From the same foundation stone on the esplanade, Muhammad’s journey took him to heaven. In Islam, the entire esplanade, not just its two main structures (al-Aqsa mosque and the Dome of the Rock), is considered to have a mosque’s sanctity. To Sunni Muslims, the esplanade is Islam’s holiest site after Mecca and Medina. See Crisis Group Middle East Report N°159, The Status of the Status Quo at Jerusalem’s Holy Esplanade, 30 June 2015.Hide Footnote

The second intifada erupted in September 2000, beginning the most violent Israeli-Palestinian escalation since 1967. In 2001, Israel shut down Orient House – the PLO’s de facto headquarters in Jerusalem, where political, social and cultural activities took place – and has since forbidden all Palestinian political activity in East Jerusalem.^[fn]For details, see Crisis Group Middle East Report N°135, Extreme Makeover? (II): The Withering of Arab Jerusalem, 20 December 2012.Hide Footnote Suicide bombings, which took a particularly high toll in Jerusalem, led the Israeli public to support erecting a massive separation barrier to prevent entry of would-be attackers from the West Bank (very few attackers came from East Jerusalem). Cut off from the Ramallah-based Palestinian Authority (PA) and without local leadership, large families in East Jerusalem attempted to fill the political vacuum. But they could not prevent the dissolution of the area’s social fabric or the rise of criminality. Because boundaries are porous, particularly for drugs and crime, these problems have begun to plague the city’s Jewish population as well.^[fn]An Israeli civil society activist with a long history of work in the city said: “Whether Jerusalem will be divided or united, it is our interest to care for the city’s Arabs. Poor sanitation leads to a proliferation of diseases. East Jerusalemites are entitled to treatment in our hospitals, financially covered by our social security. This is exacerbating the shortage of beds. Poverty and poor education levels in East Jerusalem nourishes theft: it is no coincidence that Jerusalem leads Israel’s cities in car theft”. Crisis Group interview, January 2019.Hide Footnote

Whereas elsewhere in the West Bank the Israel Defence Forces (IDF) determined the barrier’s route, based partly on security considerations, in Jerusalem Prime Minister Ariel Sharon saw to it that the barrier’s path was guided primarily by political considerations: setting Israel’s potential future borders. Though the barrier for the most part followed the city’s municipal boundaries (themselves unilaterally determined by Israel in 1967), it also strayed from them in two important respects: first, it included within Israel several large settlement blocs outside municipal Jerusalem (Givat Ze’ev to the north, Ma’ale Adumim to the east and Gush Etzion to the south); and second, in two crowded Palestinian-populated areas within municipal Jerusalem, Shuafat refugee camp (as well as parts of adjoining Anata) and Kafr Aqab, Sharon opted to route the fence inside Jerusalem’s municipal boundaries, thus placing Shuafat/Anata and Kafr Aqab east of the barrier. (Sharon did the same in part of al-Walaja, in the southern part of East Jerusalem, as well as in al-Sawahra, in the east.)

Soon thereafter, the Israeli police stopped operating in these areas. All other Israeli authorities followed suit, leaving these Palestinian Jerusalemites forced to pay municipal taxes, lest they lose their residency, while receiving almost no municipal services. Lawlessness, poverty and crime increased.

Tens of thousands of West Bankers moved into the areas without Israel’s permission, residing illegally, according to Israeli law, within occupied East Jerusalem, even though both it and the rest of the West Bank are occupied territory under international law: some came for cheap housing, built in the absence of regulations; some were married to Jerusalemites, whom Israel has, as a rule, refused permission to live with their West Bank spouses in Jerusalem west of the barrier.^[fn]Jerusalemites are subject to an Israeli law that bans the unification of Palestinians with family members from both the West Bank and what Israel considers its sovereign territory, ie, including occupied East Jerusalem.Hide Footnote Others wanted proximity to higher-wage employment in the Jerusalem area; and still others sought a refuge from both the PA and Israel.^[fn]A mukhtar (headman) in Shuafat, Jamil Sanduqa, said: “Since 2004 many Palestinians have moved here from the territories in search of work near Jerusalem, and with them a lot of criminals who escaped the Palestinian Authority looking for a safer place. We became their haven. … Life here is very similar to anarchy”. Quoted in Elior Levy, “No man’s land in East Jerusalem”, Yediot Ahronot, 22 January 2011. For a study of the two areas, see Candace Graff, “Pockets of Lawlessness in the ‘Oasis of Justice’”, Jerusalem Quarterly, no. 58 (2014), pp. 13-29.Hide Footnote The municipality estimates, conservatively, that the number who moved into Shuafat/Anata and Kafr Aqab is between 40,000 and 60,000, for an overall Palestinian population living inside these two areas estimated at 140,000; these figures do not include the much smaller populations in the other two areas east of the barrier, al-Sawahra and al-Walaja.^[fn]There are no exact figures, not least because many Jerusalem ID holders residing in these areas have registered under new addresses lying west of the barrier, for fear of excision. An Israeli official said the municipality’s “conservative estimate” of the population without permanent residency now residing in the area was 60,000. Crisis Group interview, Israeli official, Jerusalem, September 2018. Another official suggested a lower figure, arguing that the prevalent government assessment is “at least a third of the 120,000-140,000 residents” of these areas. David Koren, “The Arab Neighbourhoods between the Security Fence and Jerusalem’s Municipal Boundary”, Jerusalem Institute for Strategy and Security, 2 January 2019. Since Israel erected the separation barrier, West Bankers with spouses from East Jerusalem have often chosen to reside in the areas of municipal Jerusalem beyond the barrier so that the Jerusalemite spouse would not lose his or her permanent resident status (which is removed when Palestinians are found to have their “centre of life” outside the city for more than seven years). The children of such couples are eligible to receive permanent residency, but, in many cases, Israel has not granted it. Crisis Group interviews, East Jerusalem residents, Shuafat and al-Tur, November 2018. The large-scale move into these areas after the barrier’s erection was further catalysed by the abundance of relatively low-cost housing once enforcement of Israeli construction standards and restrictions were removed and tall residential buildings were densely built.Hide Footnote During the outbreak of attacks by Palestinians in 2014-2017, which some have called the al-Quds Intifada, roughly half the perpetrators came from these areas.^[fn]In October 2016, in an area adjacent to Kafr Aqab, the Qalandiya refugee camp, Israel arrested six Palestinians whom they accused of establishing an Islamic State cell. Koren, “The Arab Neighbourhoods”, op. cit.Hide Footnote

On 6 December 2017, the U.S. recognised Jerusalem as Israel’s capital; in May 2018, it relocated its embassy from Tel Aviv to Jerusalem; and on 4 March 2019, it shut down its Jerusalem consulate and merged it into the embassy.^[fn]So far only a few countries have followed suit, though with more limited measures. Australia, for example, recognised only West Jerusalem as Israel’s capital. “Australia recognizes West Jerusalem as capital of Israel”, The New York Times, 15 December 2018. See also Raphael Ahren, “Czech House, feted as ‘first step’ in embassy move, opens in Jerusalem”, Times of Israel, 27 November 2018.Hide Footnote Farther away but in the same vein, on 25 March the U.S. recognised Israeli sovereignty over the occupied Golan Heights. These moves lent encouragement to Israel’s leading political and rabbinic advocates of annexation, who argue that steps once deemed impossible (because of international opposition) have now become possible.^[fn]Ofer Zalzberg, “Encouraging the Knesset’s Right Wing”, Sada (Carnegie), 14 December 2017. A leading national-religious rabbi authored a formal letter to President Donald Trump, comparing him to King Cyrus, who allowed Babylon’s Jewish exiles to return to the Land of Israel and rebuild the Temple in Jerusalem, asking him “to complete the recognition act by allowing the Jewish people to build the Third Temple”. Letter on file with Crisis Group, January 2018.Hide Footnote Israeli leaders have advanced several ambitious plans to consolidate control of the occupied East Jerusalem.^[fn]The Prime Minister’s Office asked Israeli officialdom to provide new ideas that the U.S. might support over the coming year and a half before the presidential election in November 2020.Hide Footnote Israel’s government purposely met to authorise the five-year plan for doing so the day after the U.S. inaugurated its embassy in Jerusalem, seeking “maximal symbolic gains and international backing”.^[fn]Crisis Group interview, Israeli official, Jerusalem, June 2018.Hide Footnote

This report sheds light on Israeli policymaking in occupied East Jerusalem. It analyses existing policy plans; it also describes intra-Israeli power struggles that affect Jerusalem policy as well as these policies’ probable impact on the conflict and prospects for its resolution. It is based primarily on nearly a hundred interviews with Israeli officials and elected leaders, PA and PLO officials, diplomats and civil society activists between January 2018 and May 2019.

Since 1967, successive Israeli governments have sought to maintain a large and lasting Jewish majority within Jerusalem’s municipal boundaries, as unilaterally determined by Israel shortly after it occupied East Jerusalem and the rest of the West Bank in 1967. Israeli governments pursued these objectives primarily through settlement construction, bringing Jews to East Jerusalem and neglecting the Arab parts of the city to impede Palestinian natural growth and nudge Palestinians to depart.^[fn]In June 2019, Israel’s state comptroller published a report harshly criticising Israeli and Jerusalem authorities for their treatment of the city’s Palestinian residents: 75 per cent of East Jerusalemites live below the poverty line, compared to 29 per cent of Jews and 52 per cent of Palestinian citizens in Israel. Of the children in East Jerusalem, 81 per cent live in poverty. One in four drop out of school between 9th and 12th grade. There is a shortage of more than 2,000 classrooms for East Jerusalem students. Even though Palestinians make up roughly 40 per cent of Jerusalem’s population, they receive only 10 per cent of the sanitation department’s services, 7 per cent of the city’s dumpsters and 6 per cent of the garbage disposal routes. “Garbage and poverty: watchdog blasts Israel’s services to Arab East Jerusalem”, Haaretz, 2 June 2019.Hide Footnote

But Israel has consistently failed to hit its numeric targets. The size of the city’s Jewish majority has continued to shrink, declining from a ratio of 74 Jewish to 26 Palestinian residents in 1967 to a 62:38 ratio in 2016.^[fn]In 1967, Jerusalem’s population was 74 per cent Jews and 26 per cent Palestinians; in 1990, it was 72 per cent Jews and 28 per cent Palestinians; in 2000; it was 68 per cent Jews and 32 per cent Palestinians; and in 2016, it was 62 per cent Jews and 38 per cent Palestinians. The 2016 ratio works out to 550,100 Jewish and 332,000 Palestinian residents. “Jerusalem: Facts and Trends”, Jerusalem Institute for Policy Research, 2018. A former municipal councillor pointed out that Interior Ministry figures for Jerusalem’s overall population are consistently some 10 per cent higher than those kept by the Central Bureau of Statistics. Crisis Group interview, Jerusalem, January 2019.Hide Footnote Part of the story is Israel’s failure to attract Jewish Israelis into the city, combined with Jewish outmigration to other parts of Israel. But the primary reason for the narrowing Jewish majority is that Palestinian population growth has outpaced that of the Jewish population.^[fn]Since 2010, the average annual population growth rate has been 3.2 per cent for Arabs and 1.8 per cent for Jews. “Jerusalem: Facts and Trends”, op. cit.Hide Footnote In response, Israel adjusted its demographic objectives downward. Whereas in 1973 the Inter-Ministerial Committee for Checking Development Rates in Jerusalem (aka the Gafni Committee) set a goal of preserving the ratio that existed at the time (73.5 per cent Jews to 25.5 per cent Arabs), in 2007 the Jerusalem Master Plan 2000 reset the target to a 60-40 ratio.^[fn]Efrat Cohen-Bar, “Trapped by Planning: Israeli Policy, Planning and Development in the Palestinian Neighbourhoods of East Jerusalem”, Bimkom, 2014.Hide Footnote Israeli officials increasingly doubt the feasibility of even this lowered objective.^[fn]An Israeli official stated in 2018 that 59 per cent of the city’s residents were Jewish and that birth rates had not changed. Crisis Group interview, Jerusalem municipal official, Jerusalem, September 2018.Hide Footnote A candidate in the 2018 mayoral race, Ze’ev Elkin, the current Jerusalem affairs minister, warned Jerusalemites that by the 2023 municipal election the city may no longer have a Jewish majority.^[fn]Crisis Group interview, Likud official, Jerusalem, March 2019. Predicting demographic parity is challenging on account of changes in birth and immigration rates. Israeli planners predict that in 2040 Jerusalem will have 1,550,000 residents, of whom Palestinians will make up 44 per cent (682,000). Nadav Shragai, “The Arab ‘Demographic Boom’: Jerusalem’s Jewish Majority is Declining”, Makor Rishon, 11 November 2017. The prediction omits some 60,000 status-less Palestinians who today reside within Jerusalem’s municipal boundaries and will likely number over 100,000 by 2040.Hide Footnote

Israel’s territorial policy objectives in Jerusalem – building large Jewish population centres in and around the occupied East to ensure permanent Israeli control of the city – have proven more attainable.^[fn]For fuller details about the policies toward these three belts, see Crisis Group Middle East Report N°134, Extreme Makeover? (I): Israel’s Politics of Land and Faith in East Jerusalem, 20 December 2012.Hide Footnote Israeli settlement in and around occupied East Jerusalem consists of three “belts”: an outer belt that defines what Israel calls Greater Jerusalem; a middle belt connecting West Jerusalem to Mount Scopus (a UN-protected enclave with Israeli institutions from 1949 to 1967); and an inner belt encircling the Old City.^[fn]See Appendix A for a map.Hide Footnote

The outer belt, which circumscribes a purported Greater Jerusalem, comprises three “fingers” of suburban settlement, each of which extends roughly 10km from the city’s municipal boundaries into the occupied West Bank: Givat Ze’ev in the north, Ma’ale Adumim in the east and Gush Etzion in the south. There is a broad Israeli consensus that, with or without a peace agreement, the three main Greater Jerusalem settlements should be incorporated into the State of Israel.^[fn]Since the mid-1990s, Israeli governments have failed to connect the central finger (containing Ma’ale Adumim) to Jerusalem, due to international pressures. Many in the international community view linking Ma’ale Adumim to Jerusalem – via settlement construction in an area that lies between them, known as E-1 – as a near-fatal blow to the prospect of a viable Palestinian state. Construction in E-1 is widely perceived as particularly damaging because it would all but disconnect East Jerusalem from a future Palestinian state and prevent its outward expansion.Hide Footnote Moreover, Israeli governments have been making slow but steady progress at merging these settlements, as well as Jerusalem’s western suburbs, into a single metropolis, with common infrastructure, such as public transport networks.

In the middle belt, Israel has built many new Jewish settlements in areas of occupied East Jerusalem within the city’s municipal boundaries. The oldest of these – Givat HaMivtar, Maalot Dafna, Ramat Eshkol and French Hill – were built to connect West Jerusalem with the East Jerusalem area of Mount Scopus. Others were established with the intention of encircling, from the occupied East, the Jewish and Arab city centres, thereby cutting off East Jerusalem from the rest of the West Bank. Today only a small strip of Palestinian-inhabited territory remains, between Mount Scopus and Jabel Mukaber, constituting the only significant opening from East Jerusalem into the West Bank.

The innermost belt encircles the occupied Old City and its surrounding basin, which includes the revered historical and holy sites. Here the main direct driver of settlement activity is not the Israeli government but settler groups, including non-governmental organisations and yeshivas (institutes of religious learning), that enjoy government backing for their archaeological, educational and touristic projects. These groups are building a contiguous ring of Jewish settlements and national parks in East Jerusalem to surround the Old City in the hope of preventing an Israeli withdrawal from it in any eventual settlement.

In addition to settlement facts on the ground, Israel has pursued its territorial goals by encouraging a consensus in Jewish public opinion in favour of safeguarding Jerusalem in its expanded form as “eternally united”. Jerusalem scholar Ian Lustick has characterised this policy, which the state promulgated through the school system, legislation (including the abovementioned Jerusalem Basic Law) and politicians’ speeches, as the “fetishisation of Yerushalayim”. In effect, this policy extended the deep, religious and historical attachment that Jews feel to the Old City, less than 1 sq km in area, outside the city walls to include over two dozen distant villages.^[fn]Ian Lustick, “Yerushalayim, al-Quds and the Wizard of Oz: Facing the Problem of Jerusalem after Camp David”, The Journal of Israeli History, vol. 23, no. 2 (Autumn 2004), p. 200.Hide Footnote One former senior adviser to Prime Minister Benjamin Netanyahu, asked to explain the logic of his government’s insistence on including the Shuafat refugee camp within the capital boundaries that Israel claims, retorted: “If we give up on Shuafat, we put the Old City in danger”^[fn]Crisis Group interview, Jerusalem, April 2019.Hide Footnote

Despite extensive construction in Jewish areas of Jerusalem, both in the West and in settlements within the occupied East, and the severe impediments placed even on natural growth of Arab neighbourhoods within the city, Israel has failed to achieve its goal of establishing a durable and substantial Jewish majority. A former Israeli minister described the dilemma: “East Jerusalem remains stuck in our throat: we can’t swallow it and we can’t spit it out”.^[fn]Crisis Group interview, Jerusalem, October 2018.Hide Footnote

Israeli leaders have contemplated several ambitious ways of maintaining a demographic majority in a unified greater Jerusalem. Some plans face the demographic challenge head on by altering municipal boundaries to include additional Jewish settlements within the city or to exclude Palestinian areas. Other plans aim to expand the supply of residential units for Jews in West Jerusalem, thereby increasing the proportion of Jews inside the municipal boundaries. Though Israel has adopted none of these proposals thus far, they all deserve attention, not only because they are likely to resurface in the future, but also because the political dynamics that prevented their adoption remain relevant. The main policy Israel aims to pursue, in what would be a departure from its longstanding neglect of the city’s Palestinian population, is a plan to economically integrate Palestinian East Jerusalem and its population into Israel while diluting Palestinian national identity, with the hope that Palestinians will accept Israel’s occupation of East Jerusalem, participate in municipal elections and identify as residents and citizens of Israel.

Since 1996, Israeli officials have advocated expanding the municipal boundaries of the city in order to include major settlements and to prepare the ground for removing large Palestinian-majority areas.^[fn]Nadav Shragai, “Jerusalem: Delusions of Division”, Jerusalem Center for Public Affairs, 2015, p. 66 (Hebrew).Hide Footnote Most such proposals in the Knesset had the city absorbing the settlements surrounding the city through full annexation and excising its Arab areas so their residents would lose the right to vote in its municipal elections, voting instead for a new, separate council.^[fn]Amihai Attali, “Annex Jerusalem”, Yedioth Ahronoth, 10 July 2017.Hide Footnote Increasing support for full-fledged annexation, a term Israel avoided using after 1967 to spare itself international opprobrium, reflects a growing Israeli sense of impunity.^[fn]In the aftermath of the 1967 war, Israel told world leaders it had not annexed East Jerusalem but was merely expanding Jerusalem’s municipal boundaries and applying its laws in the eastern part. Israel used the same mechanism in 1967 to extend the city eastward into the occupied West Bank without explicitly using the term annexation, hoping to limit international opprobrium. The Israeli government at the time amended two pre-existing statutes (the Law and Administration Ordinance and Municipal Corporations Ordinance), and the interior minister issued an administrative declaration (the Jerusalem Declaration, 1967). For details, see Lustick, “Yerushalayim, al-Quds and the Wizard of Oz”, op. cit.Hide Footnote The gap between Israel’s de facto annexation – through the application of Israeli law in East Jerusalem – and formal, full-fledged annexation is more than a difference in terminology. While Israel decided in 1967 that its laws would extend to occupied East Jerusalem, it never fully applied them there as it did west of the Green Line: it did not force Palestinian Jerusalemites to take up citizenship, it allowed Palestinians to use non-Israeli (first Jordanian, then Palestinian) school curricula and it did not complete land registration. Israel is now intent on gradually closing the latter two gaps.

In 2007, Likud MK Yisrael Katz introduced a draft bill, the Greater Jerusalem Law, which he has made several attempts to guide to passage. If passed, the bill would expand the city’s municipal boundaries to include the five settlements of Beitar Illit, Ma’ale Adumim, Givat Ze’ev, Gush Etzion and Efrat, defining them as “daughter municipalities”.^[fn]Thanks to their status within the area of Jerusalem, residents would be entitled to vote in the city’s municipal elections. The law further provides a degree of autonomy to the daughter municipalities whose specific authorities the interior minister is to determine: “The daughter municipalities would have councils elected by their residents on the date of elections for the Jerusalem municipality”. Draft Law “Jerusalem and its Daughters – 2017”, P/20/4386, tabled 10 July 2017. On file with Crisis Group. The five settlements have a total population of roughly 140,000 Jewish Israelis. Some of the leadership in the relevant settlements opposes the law, despite the putative additional legitimacy that annexation would win for their locality in Israeli public opinion. They oppose it in part because of taxes: if residents of settlements now outside the municipality were to join Jerusalem, they “would have to pay for Jerusalem’s poverty”. Crisis Group interview, settlement council member, Jerusalem, July 2018.Hide Footnote In addition, the plan would give the same sub-municipal status to four Palestinian areas that are now part of the municipality but lie beyond the separation barrier: Kafr Aqab, Shuafat refugee camp/Anata, al-Sawahra, and al-Walaja.^[fn]Some 140,000 Palestinian residents of Jerusalem reside in the specified Arab areas. See fn 10.Hide Footnote

In this way, Israel would kill two birds with one stone: it would upgrade the status of the five illegal settlements lying outside the municipal boundaries, while imposing a distinct administrative status on the four Palestinian neighbourhoods within the city, paving the way for their full excision from Israel’s Jerusalem municipality and, in the long run, possibly putting at risk their inhabitants’ status as Israeli residents. Should Palestinians in these areas lose their status as residents of Jerusalem, they, like Palestinians in the rest of the West Bank, would be required to obtain permits to enter East Jerusalem or Israel. Thus, Jerusalem’s Jewish population and Jewish settlements would increase in size, while the city’s Palestinian population and territory would shrink.

Since MK Katz began promoting the bill in 2007, it has failed to win government support, even after it was watered down to remove mention of full annexation, due both to international pressure and the opposition of self-styled centrist parties that were in the coalition from 2007 to 2017. In July 2017, it won Prime Minister Netanyahu’s support, following an embarrassing episode in which he first installed and then, under local and Jordanian pressure, removed metal detectors at the entrances to Jerusalem’s Haram al-Sharif/Temple Mount.^[fn]For the latest on the tensions at the Haram al-Sharif/Temple Mount, see Crisis Group Middle East Briefing N°67, Defusing the Crisis at Jerusalem’s Gate of Mercy, 3 April 2019. See also Yardena Schwartz, “Jerusalem’s forever crisis”, Foreign Policy, 2 August 2017; and Amihai Attali, “Netanyahu will promote the ‘Greater Jerusalem’ law”, Yediot Ahronot, 27 July 2017.Hide Footnote Netanyahu shifted to supporting the bill because he wanted to appear strong after backtracking on the metal detectors.

But, even then, it faced opposition. Ultra-Orthodox politicians announced they would oppose the measure, primarily because a clear majority of the residents in the expanded areas are not ultra-Orthodox and their inclusion would weaken the odds of an ultra-Orthodox candidate becoming Jerusalem’s mayor. But ultra-Orthodox politicians also withheld their support because of anticipated international community opposition.^[fn]Arik Bender, “The ultra-Orthodox object to the ‘Greater Jerusalem Law’ – ‘will harm us in elections’”, Ma’ariv, 26 October 2018. In line with the ultra-Orthodox emphasis on respecting the traditional vow “not to rebel against the other nations”, United Torah Judaism MK Uri Maklev cited international concerns: “The law has sensitive diplomatic dimensions and both immediate and future municipal implications, which is why we are very careful regarding this law and cannot approve it when advanced with underhanded opportunism”. Ibid.Hide Footnote Even the Trump administration opposed the law.^[fn]Crisis Group interview, U.S. diplomat, Tel Aviv, 17 October 2018.Hide Footnote Coalition chairperson and Likud MK David Bitan explained: “There is American pressure that claims this is about annexation and that this could interfere with the peace process”.^[fn]Israel Army Radio, 29 October 2017.Hide Footnote The combination of ultra-Orthodox opposition and U.S. pressures led to an indefinite postponement. Since then, efforts to rally support for the legislation have stalled.

Since 2017, Jerusalem Affairs Minister Ze’ev Elkin, a mayoral candidate who lost in October 2018 but retained his ministerial post, has advocated excising the city’s Palestinian areas that lie beyond the separation barrier. Israel’s Jerusalem Basic Law prevents the interior minister from altering the city’s municipal boundaries, in contrast to his authority elsewhere in the country. Elkin therefore sought to enable excision by amending the Jerusalem Basic Law.^[fn]Crisis Group first used the term “excision” in discussing schemes such as Elkin’s in Crisis Group Reports, Extreme Makeover (I and II), op. cit. Others have since adopted the term. See, for example, “Destructive Unilateral Measures to Redraw the Borders of Jerusalem”, Ir Amim, January 2018.Hide Footnote His proposal differs from another, unpopular Likud proposal, which called for handing the excised areas to the PA as a step toward a potential two-state partition.^[fn]Then-Likud MK Anat Berko has reportedly advocated excising nearly all Arab areas outside of the Holy Basin and transferring them to the PA. According to her plan, the areas would initially be classified as Area B (in which, according to the Oslo II Interim Agreement, there was to be Palestinian civil control and mixed Israeli/Palestinian security control), and ultimately become Area A, and thus fall under full Palestinian control. The separation barrier would be adjusted accordingly, in order to separate Jews from Arabs and to build what she characterised as “infrastructure allowing free movement without friction”. Some 300,000 Palestinians would consequently lose their permanent resident status, perhaps gradually. When all was said and done, the contracted city would retain only 30,000 Palestinian residents, mostly in the Old City. Ben Caspit, “Exposure: the separation plan which would bring a 95% Jewish majority in Jerusalem”, Ma’ariv, 1 October 2017. MK Barko’s plan won no public support among Likud ministers and MKs because it impinges on the notion that Jerusalem must remain “eternally united”. See, for example, Hezki Baruch, “Gamliel: opposed to Berko’s plan”, Arutz 7, 1 October 2017. Similarly, during his first mayoral term (2008-2012), Nir Barkat supported excising the same areas and transferring them to the Civil Administration of Judea and Samaria, the military unit responsible for Israel’s civilian policy in the West Bank, but then reversed his position when he decided to become a Likud leader. A PA official said: “We will not take these areas from Israel just so it becomes easier for Israel to keep al-Aqsa. Israel cannot rescind their residency status without us granting them IDs and we will not do that. Jerusalem should be handled comprehensively, not in bits and pieces at Israel’s whim”. Crisis Group interview, Ramallah, December 2018.Hide Footnote Instead, Elkin has proposed transforming the excised areas into separate local municipal councils. According to Jerusalem expert Nadav Shragai, the Elkin plan’s initiator, excision will turn the demographic dial back to a ratio of 69 per cent Jews to 31 per cent Palestinians.^[fn]Nadav Shragai, “A Jerusalem Solution: One Sovereignty, Multiple Local Authorities (including for the Arab Neighbourhoods)”, Jerusalem Center for Public Affairs, 20 February 2018. Elkin himself argues that roughly half of these areas’ residents are not Jerusalem residents, and he claims that his plan therefore “would discard between 50 and 60,000 city residents. Bringing the ratio back to 70:30, not 60:40 as it is today”. Roee Aharoni, “The new Jerusalem”, Olam Katan, 17 November 2017.Hide Footnote (In contrast, retaining the territory would leave Israel responsible for the 40,000-60,000 inhabitants of East Jerusalem who do not have Jerusalem residency, leaving Israel to grapple with demands to grant these Jerusalem inhabitants residency, or, less probably, devising policies that would force them to leave.)

Others are more sceptical. A municipal official claimed that the Elkin plan is likely to deliver much more partial results, primarily because many residents of these areas have prepared for the possibility of excision by changing their formal address to one west of the barrier and that many will relocate westward as soon as excision seems imminent.^[fn]The official said: “The planners of the fence did not anticipate that it would actually strengthen the attachment of the population beyond it to the city. Their fear of being detached from Jerusalem turned them into the most scrupulously law-abiding residents with respect to the conditions necessary for retaining their residency, such as tax payments and registering their children only at Jerusalem schools. As soon as they believe that excision is imminent, they will seek to relocate into the areas within the fence. The population in the excised areas will be divided into several groups: those who have the financial means to immediately relocate to a house that they will buy; those who will relocate into a room in the house of family or friends (if only for the sake of being registered as living there); and those who will be stuck because they have a West Bank spouse for whom residing inside Jerusalem is illegal”. Crisis Group interview, Jerusalem, November 2018. A former municipal councillor said many residents of these areas, “possibly a majority among them, have already changed their address to one within the fence”. Crisis Group interview, Jerusalem, January 2019. A Jerusalemite PLO official said that in the event of a plan for excision, even the poorest residents would relocate to the non-excised areas, “even if they have to sleep in the streets – they will put up tents”. Crisis Group interview, December 2018.Hide Footnote Palestinian Jerusalemites and some Israeli human rights activists share the belief and fear that such excision would be a step toward extensive residency revocations.^[fn]Crisis Group interviews, Jerusalem, January 2018-May 2019.Hide Footnote If Israel were to revoke residency rights for the excised areas’ inhabitants, it could serve as another sort of precedent: when negotiating a peace agreement with the Palestinians, previous Israeli prime ministers have considered excising Palestinian towns in Israel proper by transferring them to a Palestinian state in exchange for annexing large settlement blocs in the West Bank.^[fn]For a discussion of various Israeli plans to transfer Israeli towns populated by Palestinian citizens of Israel to a future State of Palestine as part of an Israeli-Palestinian peace agreement, see Shaul Arieli and Doubi Schwartz (with the participation of Hadas Tagari), “Injustice and Folly: On the Proposals to Cede Arab Localities from Israel to Palestine”, The Floersheimer Institute for Policy Studies, July 2006. For Prime Minister Sharon’s plan, see “The disengagement plan from the ‘Triangle’”, Ma’ariv, 4 February 2004. For Ehud Barak’s endorsement of such a transfer, see Benny Morris, “Camp David and after: an exchange – an interview with Ehud Barak”, The New York Review of Books, 13 June 2002. For the Netanyahu government’s discussion of such a transfer, see “Israel reportedly offering land and its 300,000 residents to Palestinians”, The Times of Israel, 1 January 2014.Hide Footnote

The argument for such an excision of Palestinian towns in Israel, done against the will of the local population, could be strengthened if a precedent were established in which Israel had already altered the status of Palestinians in areas it considers its sovereign territory. Jerusalem municipal councillors from both left and right share the sense that excision would turn an already dire situation into an outright catastrophe.^[fn]A left-leaning councillor assessed the impact of excision on the area’s Palestinian residents: “Without the connection to Jerusalem and its unique government subsidies, these areas will be entirely neglected. This will make them the poorest areas in all of Israel. Kafr Aqab will be like Gaza”. Crisis Group interview, Jerusalem, 1 May 2019. For years, however, human rights organisations have already described these areas as “entirely neglected”. A right-leaning councillor focused on the potential adverse security-related consequences for Jerusalem’s Jewish residents. “King against Elkin: ‘Jerusalem will become the Gaza envelope’”, Kipa, 14 October 2018.Hide Footnote

Excision has failed to win support in the Knesset largely because of internal divisions on the right, where hardline religious Zionists caution that any reshaping of Jerusalem’s boundaries could create a situation in which it would become clear to all Israelis that the notion of Yerushalayim is malleable.^[fn]Mayoral candidate Elkin was repeatedly accused of support for “dividing Jerusalem” because of his plan. See “Moshe Leon to Srugim: ‘Elkin moved from Kadima to the Likud; there are cracks in his political past’”, Srugim, 5 September 2018; and “King against Elkin”, Kipa, 14 October 2018.Hide Footnote As a member of Jewish Home party explained, making reference to Tzipi Livni, a prominent proponent of a two-state partition, “if you can divide Jerusalem this way today, Livni will divide it in a different way tomorrow”.^[fn]Crisis Group interview, Jewish Home activist, Tel Aviv, March 2018.Hide Footnote

In an attempt to win a Knesset majority for changing the Jerusalem Basic Law so as to allow excision – an unpopular move among right-wing voters who take Jerusalem’s “eternal unity” as an article of faith – Elkin and Education Minister and Jewish Home chairperson Naftali Bennett proposed in July 2017 an amendment that coupled excision with a more popular move: an increase of the necessary parliamentary majority for handing any of the city’s pre-excised parts to a foreign entity (such as the Palestinians). This way, a future Palestinian state would be less likely to gain control of these occupied areas, irrespective of whether they remained inside Jerusalem’s municipal boundaries. Netanyahu backed the move.^[fn]Crisis Group interview, Likud MK, Jerusalem, October 2018.Hide Footnote

But hardline religious Zionists, led by MK Betzalel Smotrich, successfully rallied the Jewish Home party against excision because they feared that it would set the stage for future partition of the city. The hardliners forced Bennett to retract his support for excision and to modify the legislative amendment hours before the vote.^[fn]Ariel Kahane, “Double-edged sword: the drama behind the Jerusalem law”, Makor Rishon, 7 January 2018.Hide Footnote As a result, the final text included only the increase in the size of the parliamentary majority needed to hand to a foreign entity areas within the city’s current municipal boundaries, not the part about enabling excision, which did not pass. Advancing excision in the future will therefore be impossible through a mere directive from the interior minister, as Elkin had planned. It will now require securing a Knesset majority in three votes.^[fn]Nadav Shragai, “A Jerusalem Solution”, op. cit.Hide Footnote

Though few voters in the municipal election chose candidates based on their East Jerusalem agendas, had Elkin won he would almost certainly have used city hall to promote excision and strengthen his hand against annexationist opponents of excision such as Smotrich, potentially gaining support for his original plan of amending the Jerusalem Basic Law. His victory would have given excision electoral backing and institutional authority.^[fn]The excision proposal sits in tension with the Jerusalem municipality’s efforts since late 2018 toward the Shuafat refugee camp/Anata area, where it has increased its presence and assertion of sovereignty, taking steps it had previously avoided: issuing demolition orders, collecting municipal taxes from households and shop owners, and collecting garbage. Clashes between Israeli forces and camp residents have increased as a result of Israel’s assertion of sovereignty. An UNRWA official said that Israel had fired unprecedented amounts of tear gas in the camp during the past half year. Crisis Group interview, UNRWA official, Jerusalem, May 2019. The Jerusalem municipality appears to be attempting to mitigate the spillover of problems (eg, widespread drug use and criminal activity) from the camp to the nearby Jewish settlements of Pisgat Ze’ev and French Hill. Crisis Group interview, Israeli expert for Jerusalem, Jerusalem, May 2019. Elkin aims to curb the same risk of spillover through excision.Hide Footnote Mayor-elect Moshe Leon, by contrast, who competed with Elkin for Likud votes, was the candidate most vocally critical of excision, on the grounds that it would ultimately turn over parts of Israel’s capital to the PA.^[fn]Leon said: “If you transfer territory from Jerusalem to an Arab municipal authority, tomorrow another American president or a different left-wing prime minister will say, ‘seeing as you have given up on this territory, let’s pass it to the Palestinian Authority’”. Uzi Baruch, “Moshe Leon to Arutz 7: ‘Jerusalem needs a manager, not a politician’”, Arutz 7, 8 August 2018.Hide Footnote A municipal official stated that once Leon takes office “he will quickly realise excision is sensible, but in public he will likely oppose it so that he will not appear to go back on his word”.^[fn]Crisis Group interview, Jerusalem, November 2018. A knowledgeable former Israeli official ruled out Elkin’s plan on account of its political and constitutional complexity, as well as the ill-fated precedents of such local authorities in Arab areas of Israel. Elkin’s proposal for governing the new local authority with an appointed committee draws on a similar mechanism which Israel has long used in Arab localities across the country, but which – it more recently has conceded – has failed to secure local legitimacy. The interior ministry no longer appoints such governing committees, calling instead for independent elections. Elkin indeed failed to secure the broad political support for amending a Basic Law. Instead, the former official encouraged pursuing policy alternatives with an eye not only to demographics but to the lawlessness reigning there. The alternatives include keeping everything in limbo; handing the areas over to the PA unilaterally or as part of an agreement; Elkin’s plan of establishing additional local authorities within the current municipal boundaries; retracing the barrier so that it correlates with municipal boundaries; redividing de facto service provision based on the barrier’s route (the Israeli army on the barrier’s West Bank side and the municipality to its east); forming an accompanying security mechanism for municipal employees and subcontractors working on the eastern side of the barrier while granting the municipality a major budget increase for service provision to all residents of these areas (with and without Jerusalem residency permits); and establishing for these areas a new Israeli administrative unit that would renew old buildings, invest in job training for Jerusalem ID holders and expel inhabitants who do not carry a Jerusalem ID. See Koren, “The Arab Neighbourhoods”, op. cit. But given the huge inequality in resources allocated to Palestinian areas compared to Jewish ones, it is highly unlikely that politicians will carry out any plan that relies on budgetary increases for Palestinians, who for the most part do not vote.Hide Footnote

The main new policy approach that has managed to win support across the political spectrum is primarily economic. On 13 May 2018, known in Israel as Jerusalem Reunification Day, marking the 1967 consolidation under Israeli rule of the city’s western and occupied eastern parts, Netanyahu’s cabinet passed a decision entitled “Narrowing Socio-Economic Gaps and Economic Development in East Jerusalem”.^[fn]The government announcement issued on the day the cabinet took Decision 3790 framed it as one of five decisions pertaining to the “strengthening of Jerusalem”. The four other decisions were: allocating 350 million shekels [$99.9 million], with an emphasis on the “Old City Basin”, for the “restoration and preservation of infrastructure, public spaces and sites of historical, cultural and archaeological importance in the city and around it”; a national plan for “revealing ancient Jerusalem … with ongoing, constant governmental activity to heighten and emphasize the city’s role as King David’s capital and the modern capital of Israel”; advancing a tourist cable car for the historical core of Jerusalem; and encouraging cinema studies in Jerusalem. Announcement of the Cabinet Secretary at the end of the government meeting of 13 May 2018, Prime Minister’s Office, 13 May 2018.(Hebrew).Hide Footnote Announced with great fanfare, this plan, to be carried out over the next five years, shifted course from decades of neglect of Palestinian East Jerusalem by national governments and mayors alike.^[fn]Government decision 1775 of June 2014 allocated 300 million shekels for the period 2014-2018: 100 million shekels for security and 200 million shekels for socio-economic development. Government decision 2684 of May 2017 allocated 176 million shekels, mostly for environmental protection, for the years 2017-2021. The former prime minister and Jerusalem mayor Ehud Olmert explained this neglect in a 2012 interview, saying he saw no reason to invest in areas that would not ultimately fall under Israeli sovereignty. “We avoided investing in areas which I think that in the future will not be part of the Jerusalem that will be under Israeli sovereignty”. “Olmert: We will need to reach an agreement in Jerusalem including over the Temple Mount”, Ma’ariv, 20 May 2012. Furthermore, because East Jerusalemites by and large do not participate in Israeli municipal and national elections, Israeli politicians have had no electoral incentive to direct funds toward this population.Hide Footnote The five-year plan allocates nearly 2 billion shekels (over $500 million) for the years 2018-2023, focusing on improving education, advancing employment and upgrading public spaces.^[fn]Government decision 3790, “Narrowing Socio-Economic Gaps and Economic Development in East Jerusalem”, 13 May 2018 (Hebrew).Hide Footnote The plan does not stipulate that spending is to be done only on the western side of the barrier. It is likely, however, that the state will spend only low sums east of the barrier, because the municipality provides limited services there as it is.^[fn]The scope and nature of investments in these areas could evolve as the plan is implemented: some officials advocate a human capital approach. A former Arab affairs and East Jerusalem adviser to Mayor Barkat, who currently manages the Education Ministry’s five-year plan for East Jerusalem, proposes that in light of the dire, probably irreversible condition of these areas’ infrastructure, the government and the municipality should invest primarily in human capital, focusing on Jerusalem ID holders. Koren, “The Arab Neighbourhoods”, op. cit.Hide Footnote

The magnitude of investment and the seeming willingness to take responsibility for East Jerusalem have various conflict-relevant implications. These include, most importantly, facilitating greater Israeli government and municipal presence in the Palestinian areas of East Jerusalem as part of a shift from broad neglect of Palestinian areas to the beginning of what is intended to be a decades-long process of absorbing most of East Jerusalem into Israel. Likud ministers, both two-staters and annexationists, who advocate this shift see it as an element of a long-term policy to remould the national identity of Palestinian Jerusalemites from “Palestinian” to being “Arab of Jerusalem”.^[fn]Crisis Group interview, Likud Central Committee member close to Likud ministers, Jerusalem, January 2019. So far, Israel’s policies have been limited to drawing East Jerusalemites into Israel’s economy, not its polity through the extension of citizenship. Interior Ministry officials claim change is imminent, and that wait times for citizenship will be dramatically reduced from an average of six years to one. “Israel vows to drastically cut wait time for Jerusalem Palestinians’ citizenship applications”, Haaretz, 26 February 2019.

The five-year-plan, known as Government Decision 3790, is premised on continued Israeli rule over East Jerusalem and continued Israeli rejection of either a PA presence in Jerusalem or the establishment of Palestinian municipal self-governance (see Appendix B for a summary of the plan’s main elements). It expands and deepens Israeli municipal control over occupied East Jerusalem by allocating funding for services and activities that Palestinian residents and human rights organisations have long called for. Yet it is unlikely to fully achieve its stated objective of redressing socio-economic inequality in Jerusalem: $106 million per year over five years falls far short of the amount needed to address gaps accumulated during more than 50 years of neglect.^[fn]An Israeli official supportive of the five-year plan said: “We are fully aware of the wide gaps. You can’t fix the omissions of 50 years in five. But we have to start somewhere”. Crisis Group interview, Jerusalem, March 2019. He gave a few striking examples based on government data: Arab per capita income stands at 40 per cent of that of Jews. Some 79 per cent of Arab families are poor compared to 23 per cent among Jews. An estimated 68 per cent of Arab pupils do not obtain a high-school diploma compared to 30 per cent among Jews. There are roughly twenty times more playgrounds per 100 children in Jewish areas than in Arab ones.Hide Footnote Unless the state increases the overall sum considerably, future five-year plans will also fail to close the gap between the city’s Jewish and Palestinian residents, as the Jewish population advances in prosperity more rapidly than the Palestinian one.^[fn]Implementation of the plan has been limited so far. During the first year, much of the work was devoted to planning. Ir Amim, an Israeli non-profit that aims to make Jerusalem more equitable for Israelis and Palestinians, announced that it will publish quarterly monitoring reports about the plan’s implementation. “First Quarterly Report – Decision 3790 of 13/5/2018 on Narrowing Socio-Economic Gaps and Economic Development in East Jerusalem”, Ir Amim, 27 May 2019. The Jerusalem Institute for Policy Research intends to publish annual monitoring reports on the plan’s implementation. Crisis Group interview, Amnon Ramon, senior researcher, Jerusalem Institute for Policy Research, Jerusalem, 22 May 2019.Hide Footnote

The plan also has the potential to significantly escalate tensions in Jerusalem and in the Israeli-Palestinian conflict more broadly. Palestinians vociferously oppose two of its elements – one encouraging East Jerusalem schools to shift to Israeli curricula (nearly half the plan’s education budget is conditioned on acceptance of Israeli curricula), which they see as a threat to their national identity,^[fn]Palestinian religious leaders in Jerusalem have vehemently denounced teaching the Israeli curriculum in East Jerusalem schools, saying the curriculum includes components that “contradict Islamic faith, Arab identity and Palestinian values”. Jerusalem’s grand mufti, Sheikh Muhammad Hussein, issued a fatwa against adopting the Israeli curriculum, calling to excommunicate those who do so. “Education: fatwa forbidding the Israel curriculum”, Ma’an News, 27 February 2018. So did Sheikh Ikrima Sabri, the former grand mufti of Jerusalem. “Israel steps up war on Palestinian schools”, Gulf News, 21 October 2018. For an Israeli analysis of these and other Palestinian reactions, see “The Palestinian Authority, Senior Palestinian Religious Leaders and Local Figures in East Jerusalem Are Waging a Campaign to Keep the Israeli Curriculum Out of East Jerusalem Schools”, Meir Amit Intelligence and Terrorism Information Center, 7 February 2018. A municipal official said it was actually Palestinians who originally asked for the curricular change in several schools: “A few years after the separation fence was erected, parents demanded Israeli classes in certain schools in order to open the door to Israeli universities. Some school principals agreed, with private institutions of Arab-Israelis seizing this as a business opportunity. This happened quietly and without major controversy until Elkin and others turned it into a nationalist issue. The condemning fatwas quickly popped up, along with newfound resistance to an increasingly popular trend”. Crisis Group interview, Jerusalem, November 2018. In an interview given to a national-religious newspaper ahead of Jerusalem Day, when Israelis celebrate the conquest of East Jerusalem and the establishment of Israeli control over the Old City, Mayor Moshe Leon said he aimed to have 50 per cent of Palestinian students in East Jerusalem using Israeli curricula: “Today, only 7 per cent of the education system in the eastern part of the city belongs to the Israeli education system. … We are working very hard with the Education Department and with the Ministry of Education to increase our hold on education there, and the objective we have set is to build more schools and classrooms, and reach a situation in which 50 per cent of the [Palestinian] pupils study the Israeli curricula within five years. It is a very ambitious program, but we will do everything so that it would take place”. “‘I’m busy in Jerusalem from morning to night’”, Makor Rishon, 2 June 2019 (Hebrew).Hide Footnote and the other registering lands in Israel’s registry, which would secure legal ownership for some Palestinian lands but could also put much illegally built housing at increased risk of demolition and open the door to Israeli confiscation of unregistered lands.^[fn]In light of Israeli decision-makers’ divergent motivations for adopting the five-year plan – ranging from desire for socio-economic improvement to assertion of Israeli sovereignty over occupied territory – it is doubtful that Palestinians will see the land registration plan as anything more than a devious means of using increased service provision to promote land expropriations and greater Israeli control. Palestinians remain sceptical that the state would use East Jerusalem lands to address their needs, rather than transfer them to settlers, as has been its practice over the decades. A Palestinian civil society leader said: “Such a land arrangement would be catastrophic. The many who would lose their lands in the process would feel it is an act of transfer. The parallel is of a man told again and again over decades that a certain land is his and he can use it. Then, late in his life, when he develops amnesia, he is told: ‘Prove it’s yours’”. A lawyer from East Jerusalem similarly said that if past is precedent, the initiative will take advantage of Palestinian landowners who reside abroad, expropriating their land and transferring it to Israeli settlers. He added: “The legal facets are highly complex, both in terms of the various historical layers – Ottoman, Jordanian, Israeli – and of situations in which you have a deed for land on which resides someone else and the land is therefore given to that person in this process. There is zero trust in Israel. I do not have a shred of doubt they will use this to take lands and pass them to settlements. Our experience with Israel’s abuse of absentee properties is hugely negative”. Palestinian mobilisation against settler takeover of lands in Jerusalem has reached unprecedented heights, against the backdrop of a sale reportedly involving the PA. Clan heads have decided to remove protection from family members who sell lands, putting sellers at risk of death. Yet it seems unlikely that popular Palestinian mobilisation will be sufficient to stop a broad registration process. A former PA official said, “Palestinians will encounter greater difficultly to prevent the land registration process if it will take place in a piecemeal fashion – area by area, house by house”. Crisis Group interviews, Jerusalem, September-November 2018. A Jerusalem city councillor predicted that “the land registration reform won’t advance at the pace its initiators in government would like. We won’t see a revolution. This will likely allow limited progress with a slow rhythm”. Crisis Group interview, Jerusalem, 2 May 2019. See also “News of Jews taking over house next to Jerusalem's Temple Mount spur Palestinian media uproar”, Haaretz, 9 October 2018; “Israeli security forces raid PA offices in West Bank over sale of Jerusalem home to Jews”, Haaretz, 4 November 2018; and Yoni Ben Menachem, “PA Ostracizes Palestinians Who Sell Houses to Jews”, Jerusalem Center for Public Affairs, 1 November 2018.Hide Footnote Carrying out these policies will further heighten tensions between East Jerusalemites and the government of Israel, as well as between Palestinians who cooperate with these controversial steps and Palestinians who do not. It will also push the PA toward greater advocacy concerning the Jerusalem issue, thereby stoking tensions between the PA and Israel. One effect of such a clash could be to improve the PA’s poor standing among Palestinian Jerusalemites.^[fn]Israeli politicians and experts already advocate harsher punitive measures against PA operations in East Jerusalem, including revoking the residency of any East Jerusalemite receiving a salary from the PA and indicting those suspected of gathering intelligence for the PA. Yoni Ben Menachem, “Oslo Agreement and Jerusalem”, Arab Expert, 6 November 2018; and “MK Smotrich: Stop the ‘Jerusalem governor’ immediately”, Arutz 7, 1 November 2018.Hide Footnote

Israeli criticism of the plan has come mostly from the political left, though even these critics welcomed significant elements of the government’s decision. Most of their criticism pertained to what the plan fails to include. Advocate Oshrat Maimon of Ir Amim, an Israeli non-profit devoted to making Jerusalem more equitable for Israelis and Palestinians, said the plan is missing a chapter on planning for new construction for Palestinians in East Jerusalem: she said the existing limit on construction “is the core of the problem for Palestinians in East Jerusalem, and it is no coincidence that it is absent”.^[fn]“Will two billion shekels suffice for East Jerusalem?”, Globes, 2 September 2018.Hide Footnote

In the same vein, Haaretz’s Jerusalem correspondent argued that the plan ignores the Palestinians who live beyond the separation barrier; while pretending to welcome hundreds of thousands of Palestinians living west of the barrier into Israel, the plan in effect continues the policy of denying them citizenship, as evidenced by increasing rates of rejection of Palestinian Jerusalemite applications for citizenship.^[fn]“Analysis: The plan to ‘Israelize’ Jerusalem has 300,000 problems”, Haaretz, 13 May 2018.Hide Footnote Furthermore, because the plan does not create electoral incentives for Israeli politicians to invest in the city’s Arab districts, incentives they have lacked for more than 50 years, there are good reasons to be sceptical about the degree to which Israeli politicians would put in place even the plan’s less controversial components.^[fn]Crisis Group interview, former municipal councillor, Jerusalem, January 2019.Hide Footnote

The newly elected city council has significant influence over how the state will carry out the plan. From the outset, in the words of one municipal official, “policymaking behind the five-year plan saw a constant, ongoing tension between the professionals and the nationalists: those who act primarily with urban service provision in mind and those who act with assertion of sovereignty in mind”.^[fn]Crisis Group interview, municipal official, Jerusalem, November 2018. The official stated: “Sometimes, for example on sewage, the two logics did not clash. On other occasions, like education, they did. Once the fatwas forbidding Israeli curricula took hold, the Educational Administration of Jerusalem won the day when it insisted that Hebrew teaching would be provided informally within schools during the afternoons, even though Elkin pushed for full linkage between funding and acceptance of the Israeli curricula”.Hide Footnote The new municipal governing coalition is a mixed bag: the newly elected mayor and the ultra-Orthodox politicians who form the majority of the new municipal coalition see the assertion of sovereignty through the five-year plan as a low priority and therefore tend to side with the professionals, albeit without much enthusiasm. Some refer to Shas chairperson Aryeh Deri, whose support for Leon was decisive in the latter’s victory, as “Jerusalem’s real mayor”.^[fn]Crisis Group interview, former municipal councillor, Jerusalem, April 2019.Hide Footnote And Deri is reputedly less than eager to invest in Palestinian-populated areas in Jerusalem.^[fn]Crisis Group interview, ultra-Orthodox journalist, Jerusalem, January 2019.Hide Footnote

In contrast, the city council also includes the national-religious activist Arieh King, chairman of the hawkish settler organisation Israel Land Fund, who secured the Israel Heritage file (which affects municipal policies in East Jerusalem toward the city’s sensitive historical core) on the city council in exchange for his support for Leon in the second round of voting. Some settler leaders saw the new mayor’s decision to join several of them at a Hanukkah candelabra lighting at the Small Western Wall (a rarely visited section of the Western Wall inside the Old City’s Muslim quarter) as an encouraging sign that he will grant King a free hand in East Jerusalem.^[fn]“Mayoral attendance at a controversial site mainstreams it. Leon knows going here with Matti Dan [chairperson of the settler association Ateret Cohanim] and Land of Israel advocates like Dov Kalmanovich and Aryeh King sends a powerful signal of support”. Crisis Group interview, settler activist, Jerusalem, December 2018. For a video clip, see the tweet by Rafi Perlstein, @rp201, Yediot Yerushalayim reporter, 6:54 am, 2 December 2018.Hide Footnote The nationalist objectives advocated by Jerusalem’s settler leaders resonate in the Union of Right-Wing Parties and much of the Likud.

Israel’s five-year plan evinces a desire among some to integrate the city’s Palestinians into Israel’s economy. But economic integration sits in tension with the state’s concurrent effort to keep Palestinians separate from the Israeli polity. This latter effort is most evident in Israel’s policy of denying citizenship to the small but growing number of East Jerusalemites requesting it.^[fn]In 2016, the number of naturalisation requests reached its highest level since the early 1990s. Yet the number of those finishing the process has been declining since 2014. The interior ministry said the delays result from the higher number of applications, not a policy shift. “Leap in East Jerusalem residents’ naturalisation requests, decrease in rate of approvals”, Haaretz, 12 January 2017 (Hebrew). For further details, see “All the ways East Jerusalem Palestinians get rebuffed in bid to become Israelis”, Haaretz, 15 January 2019. There are signs that, under Supreme Court pressure, waiting times for citizenship requests are shortening considerably. “One year instead of six: Population Authority will shorten naturalisation process for East Jerusalem residents”, Haaretz, 26 February 2019 (Hebrew). East Jerusalem applicants report that waiting periods for interviews have shrunk from three years or more to slightly more than a year. Crisis Group interviews, Jerusalem, February-April 2019.Hide Footnote It is also apparent in state polices that discourage Palestinian residents from exercising voting rights in municipal elections.^[fn]For the first round of the October 2018 municipal election, Israel was intending to set up only six polling places in Arab neighbourhoods of East Jerusalem, compared with 175 in Jewish-majority areas. Only after a Palestinian candidate for municipal council, Ramadan Dabash, appealed to the court did the national supervisor of local elections recommend opening 21 polling places in East Jerusalem. Interior Minister Deri accepted the recommendation. “Interior Ministry will increase number of voting points for municipal elections in East Jerusalem”, Haaretz, 27 September 2018 (Hebrew).Hide Footnote

With a few exceptions on right and left, Israeli politicians have not promoted the political participation of East Jerusalem’s Palestinian residents.^[fn]Likud MKs helped Dabash secure funding for his electoral campaign. Crisis Group interview, Likud activist, Tel Aviv, June 2018. The party made this exception to its general approach because Dabash is a former Likud member who ran explicitly not in order to challenge Israeli rule over East Jerusalem but to secure better services from the Israeli municipality for the city’s Palestinian residents. Crisis Group interview, Likud MK, Jerusalem, October 2018. Some on the Israeli Zionist left have welcomed the prospect of Palestinian participation in municipal elections; it is their belief that most Jewish Israelis would fear that development to the extent that they would opt for a negotiated peace agreement or territorial withdrawal in order to preserve their control of the city, its resources and their demographic majority. The Save Jewish Jerusalem Movement, led by former Israeli ministers and generals, launched a campaign advocating partition of Jerusalem in order to prevent a future in which an Arab would be mayor. “Ex-minister, former Israeli officers propose plan to unilaterally divide Jerusalem”, Haaretz, 17 November 2015. As explained by an Israeli Jerusalem expert, this logic is dubious even if Palestinians, wh0 form a third of Jerusalem’s population, secure a third of the seats on the city council: “Even if all Palestinian East Jerusalemites vote, they can at best secure a minor budgetary increase. All the major things that East Jerusalem Palestinians want, like planning, policing, an end to house demolitions and control over their education curricula, cannot be approved solely by the municipality. They require approval by the prime minister and the governing coalition”. Crisis Group interview, Jerusalem, October 2018.Hide Footnote Indeed, as soon as a Palestinian, Aziz Abu Sara, stated that he was running for mayor in order to advance the establishment of two capitals in Jerusalem, Israeli hawks presented legal challenges to his candidacy.^[fn]The Israeli right-wing non-profit Lach Yerushalayim called for disqualifying Abu Sara because of his support for two capitals in the city. Shimon Cohen, “Disqualify a candidate who goes against the state”, Arutz 7, 6 September 2018 (Hebrew).Hide Footnote The Interior Ministry quickly began an inquiry into whether Jerusalem has been Abu Sara’s centre of life over the last seven years, leading him to withdraw.^[fn]Abu Sara divided his time between Jerusalem and Washington, where he worked until 2015 as co-executive director of the Center for World Religions, Diplomacy and Conflict Resolution at George Mason University.Hide Footnote

Palestinians, for their part, have shown little interest in participating in Israeli politics. Early in the 2018 municipal campaign, despite the longstanding Palestinian boycott of municipal elections and the prevailing hostility on social media networks toward the Palestinian candidates who had signalled they might run, some polls indicated that Palestinian demand for local political participation might be growing.^[fn]A Hebrew University-commissioned poll conducted in January 2018 drew the most attention. “Despite official boycott, over half of East Jerusalem’s Palestinians want to vote in city elections”, Haaretz, 15 February 2018. Though the poll only asked respondents whether they “support/oppose Palestinian participation in local elections” in principle, many media outlets and experts depicted the results as indicative of respondents’ actual intent to participate. Public opinion polls must be read carefully, particularly in East Jerusalem, due to the city’s complex politics. For a nuanced analysis, see Danny Seidemann, “Elections in Jerusalem 2018: The Palestinian Dimension”, Terrestrial Jerusalem, 17 October 2018.Hide Footnote Yet Palestinian participation in the October 2018 election was even lower than in previous years.^[fn]In the 2018 municipal elections in East Jerusalem, 1.6 per cent (3,500 of 213,000) of eligible voters, including settlers (Israel’s statistics merge the two populations), exercised their right to vote. Crisis Group interview, Yair Assaf-Shapira and Omer Yaniv, researchers with the Jerusalem Institute for Israel Studies, 4 November 2018. This rate represents a continuation of a drop in Palestinian voter turnout in municipal elections. For Palestinian voter turnout rates since 1967, see Jonathan Blake et al, “What Might Happen if Palestinians Start Voting in Jerusalem Municipal Elections?”, Rand Corporation, October 2018, p. 12. The reasons seem political rather than cultural: the minuscule participation rates contrast starkly with the whopping 84 per cent participation rate among Palestinian Arab citizens of Israel – which is much higher than the 55 per cent participation rate among Israeli Jews. “Israeli Arab municipal elections: more violence, but more women”, Haaretz, 4 November 2018. The polls were misleading because they asked Palestinians about their general openness to electoral participation, a question that did not distinguish between, on one hand, electoral participation in occupied Jerusalem today, and, on the other, electoral participation in a future scenario in which East Jerusalem is not occupied.Hide Footnote

As detailed below, the vast majority of Palestinian Jerusalemites agree that the costs of electoral participation in an institution that is part and parcel of a deepening Israeli occupation – including a sense of national betrayal and likely social sanctions from fellow Palestinians – outweigh its limited potential benefits. Palestinian Jerusalemites have the worst of both worlds: they have full obligations to the municipality (in terms of taxes and fines) but receive very limited services (as evidenced in their low share of the municipal budget).^[fn]The most recent publicly available assessment, made by the pro-equality Ir Amim for budget year 2013, claimed that the municipality allocated between 10 and 13 per cent of its budget to Arab East Jerusalem – markedly less than Palestinians’ share of the population, which in 2013 stood at 37 per cent. “Jerusalem Municipality – 2013 Implementation Budget: Ratio of Investment in East Jerusalem”, Ir Amim, December 2013.Hide Footnote The Palestinian Authority and PLO discourage them from advancing their rights in the city via the ballot box, yet the PA has provided them with only modest support, whether financial (eg, in the share of the national budget they are allocated) or political.^[fn]Crisis Group interviews, East Jerusalem businessman, Jerusalem, June 2018; East Jerusalem civil society leader, Jerusalem, March 2018. PA activities in East Jerusalem face Israeli limitations, but the PA has been transferring small sums of money to East Jerusalem institutions and to residents facing onerous Israeli policies, for example covering legal fees in house demolition cases.Hide Footnote Meanwhile, East Jerusalem has been suffering socio-economic degradation, marked by increasing criminality, drug use and prostitution, as organised Palestinian political activity has withered.^[fn]Crisis Group Report, Extreme Makeover? (II), op. cit.; Nazmi al-Jubeh, “Jerusalem: Fifty Years of Occupation”, Jerusalem Quarterly, no. 72 (Winter 2017), pp. 7-25.Hide Footnote

The October 2018 election showed that widespread Palestinian participation in Jerusalem’s municipal elections remains a pipe dream, despite some signs that change might come. Israeli officials praise what they believe to be a growing Israelisation of Palestinian Jerusalemites.^[fn]“The residents of East Jerusalem are undergoing a process of Israelisation. There is an increase in the number of requests for citizenship, in the numbers of those taking Israel’s Bagrut [matriculation] exams. This is a welcome process. … In 1967 we united Jerusalem, and today we are connecting it”. “Barkat: ‘East Jerusalem’s residents internalise something big is happening’”, Ma’ariv, 9 May 2018.Hide Footnote They are overstating the case, though Palestinians are indeed weighing the pros and cons of participating in future elections.^[fn]Advocates of participation tend to argue that Jerusalemites should not be trapped for 50 years in the contradiction of paying full taxes while not receiving full services. They also claim that such participation would not grant legitimacy to the Israeli occupation of East Jerusalem. Opponents of participation point to potential losses: first and foremost, that participation would lend legitimacy to occupation, because the Israeli government would be able to say Palestinians themselves are gradually accepting Israeli rule over East Jerusalem, including in the Holy Basin and on the Holy Esplanade. Crisis Group interviews, East Jerusalem businessman, Jerusalem, June 2018; former Orient House official, Jerusalem, October 2018. For a fuller picture of the Palestinian debate regarding participation in Israeli institutions, see Crisis Group Report, Extreme Makeover? (II), op. cit.Hide Footnote Their choice became real when Ramadan Dabash – the Palestinian candidate for city council who, as chairperson of Sur Baher’s community administration (minhal kehilati), cooperated with the Likud to secure resources for his community – set a precedent by not withdrawing his candidacy before election day, as all previous Palestinian candidates have done. Dabash has stated that he stayed in the race despite harsh threats and an alleged attempt to kidnap his child by activists who opposed his candidacy.^[fn]“A Palestinian’s failed bid to become mayor of Jerusalem highlights his community’s challenge”, Washington Post, 29 October 2018.Hide Footnote

In the end, however, Palestinian residents of Jerusalem, abstained almost entirely from voting.^[fn]A Palestinian civil society leader said: “The public showed in the municipal elections that the national issue is a priority. It stems also from a fear that the rest of the Palestinian people will view us Jerusalemites as traitors. It is also about how we will be viewed in the Arab world. Israel will use our vote to legitimise its occupation of East Jerusalem”. Crisis Group interview, Jerusalem, November 2018.Hide Footnote Focus groups held in East Jerusalem during the months preceding the election suggested that if different Palestinian candidates had run with the backing of Palestinian factions, the participation rates might have been considerably higher, but given past Israeli legal and political opposition to Palestinians running on nationalist platforms it is unclear that Israel would allow such candidates to run.^[fn]Crisis Group interview, focus group organiser, Jerusalem, November 2018.Hide Footnote There is also little reason to think that Palestinian factions would field such candidates at present.^[fn]A former PA official from Jerusalem said: “The municipal elections clearly met a national boycott. There is a shift in attitude, but it does not translate itself into action. East Jerusalemites overall find the boycott ineffective and are more open than before to vote for the municipality, but it would have to be done very differently. Not by a Likud member who takes care only of daily needs and abandons the national project. If there had been a list with respectable candidates from all areas of the city and with support from the political factions, then we would have seen many voting”. Crisis Group interview, Jerusalem, November 2018.Hide Footnote As long as East Jerusalem remains occupied, the candidate would face the same kind of factional and hence popular opposition that led to meagre electoral participation in October 2018.

In sum, Palestinians are no more interested in fully participating in the Israeli polity than Israelis are eager to include them. In this sense, Israel’s continued emphasis on economic as opposed to political integration of East Jerusalem suits both sides – even as many Palestinians reject components of the five-year plan, such as land registration, that are part and parcel of the plans for economic integration.

As seen, contestation over government policies in East Jerusalem has not been an argument between the Israeli right and the Israeli left, whose direct influence is negligible today. Rather, the dispute has taken place almost entirely within the right-wing coalition that Prime Minister Benjamin Netanyahu formed after the 2015 election. Virtually none of its members publicly supports Jerusalem’s partition. Rather, all operate on the premise that Jerusalem, east and west, is and will remain under Israeli rule – the difference being primarily whether to rid Jerusalem of the Palestinian-populated areas beyond the barrier or keep them within the city’s municipal boundaries.

The outcome of Israel’s 17 September 2019 election could have far-reaching consequences not just for Jerusalem but for the Israeli-Palestinian conflict as a whole. Prominent Likud leaders, including Netanyahu and Jerusalem Affairs Minister Ze’ev Elkin, seem increasingly ready to relinquish some control over territory in order to increase the Jewish majority in the city and concentrate resources on gradually integrating the remaining Palestinian-populated areas into Israel – economically and socially at first, with the goal of ultimately integrating them politically to the point that they vote in elections and accept Israeli rule.^[fn]A Likud MK said the three right-wing politicians nearly revised the Jerusalem Basic Law precisely for this purpose, with their plan foiled at the last minute. Crisis Group interview, Jerusalem, December 2018.Hide Footnote Elkin, the primary advocate of excising East Jerusalem Arab neighbourhoods from the city, lost in his 2018 bid to become Jerusalem’s mayor, but, tellingly, won the vast majority of votes in strongholds of the Likud and Jewish Home parties.^[fn]“There are voters and electors in Jerusalem: those who decide alone and others who decide for them”, Makor Rishon, 3 November 2018.Hide Footnote Right-wing Jerusalemites evidently did not consider Elkin’s proposal as having crossed a red line. Perhaps incoming Jerusalem mayor Leon could embrace the idea without paying too severe a political price.

The narrow right-wing government Netanyahu likely hopes to form after the September 2019 election may appear to be an improbable champion of excision. The national-religious Union of Right-Wing Parties, an electoral list – made up of Jewish Home, National Union and Otzma Yehudit (Jewish Power) – that secured five seats in the April 2019 election and is integral to a prospective right-wing coalition, has firmly opposed it so far. Opponents of redrawing Jerusalem’s boundaries, including Jerusalem council members who lead the Jerusalem-based pro-settler organisations the Israel Land Fund (Arieh King), Elad (David Be’eri) and Ateret Cohanim (Matti Dan), represent a small yet influential hardline constituency. As noted above, they already scored a success when countering Bennett and Elkin on this front by rallying the Jewish Home party in opposition to excision. They intend to persevere in preventing excision. But their success in convincing the Union of Right-Wing Parties to toe that line is uncertain because the leadership is now divided on the matter.^[fn]A National Union party member said, “Elkin explained the deeper logic to some of our party leaders and seems to have had some success”. Crisis Group phone interview, 3 May 2019.Hide Footnote The divisions might open the door to excision even in a future coalition that depends on the support of the Union of Right-Wing Parties.^[fn]Sensing this possibility, municipal councillor King, an opponent of excision, declared during the coalition-building process that he opposed renewing Elkin’s nomination to head the Jerusalem affairs ministry: “Someone who supports dividing Jerusalem cannot be minister for Jerusalem affairs. He will advance a policy that will harm the unity of the city and sovereignty in its East”. Tweet by Shlomi Heller, @Heller_Shlomi, Kol Hair reporter, 12:35 pm, 1 May 2019.Hide Footnote

A municipal official explained why the policy rationale for excision, over which right-wing Israeli leaders are at odds, could prove politically decisive:

[Outgoing Mayor] Barkat supported excision for Jerusalem-related reasons alone – in order to discard a part of the city that drew all of it downward. Elkin, however, sees this as a preview for the West Bank. For him, establishing a working precedent of a municipal council for people with Israeli residency but not citizenship is advantageous because it raises the question: why not apply it elsewhere? This is the pilot.^[fn]Crisis Group interview, Jerusalem, November 2018. A PLO official said the dangers of such excision outweigh the minor benefit it may yield in facilitating future Israeli concessions over the excised areas. He noted, however, that “in parts of the West Bank like Hebron, where the PA isn’t popular, the population might opt for such a model because they would secure Israeli residency rights, with all the associated benefits, and a modicum of self-governance through institutions that collect their taxes and then invest them in the community”. Crisis Group interview, Ramallah, December 2018.Hide Footnote

Netanyahu, like the former mayor, seems to be ambivalent about the annexationist agenda, despite his end-of-campaign pledge to annex West Bank settlements.^[fn]“Netanyahu vows to start annexing West Bank, in bid to rally the right”, The New York Times, 6 April 2019.Hide Footnote His support for excision more likely stems from a limited, Jerusalem-related reason: preserving a Jewish majority in the city.^[fn]“During the last year or so Netanyahu has been telling me he is concerned that separating ourselves from the Palestinians is becoming harder”. Crisis Group interview, former senior Netanyahu adviser, Tel Aviv, November 2018.Hide Footnote Yet if excision takes place, annexationists to the prime minister’s right could seize upon the precedent, even if only after the Netanyahu era.^[fn]A number of Israeli elected leaders believe that annexation is unlikely to have significant costs (eg, several European states retaliating by recognising the State of Palestine) and that having a precedent of Jerusalem excision – which would establish the first piece of occupied territory outside of Jerusalem and the Golan Heights that Israel treats as sovereign – justifies these limited costs. An Israeli government legal expert dismissed as wishful thinking the notion, promoted by some annexationists, that Jerusalem excision could set a precedent for annexation in the West Bank: “That’s ridiculous. One cannot infer from international acquiescence to excluding an annexed area from Jerusalem’s municipal boundaries that the international community would sit on its hands if Israel annexed a part of Area C and only gave residency rights to its inhabitants”. Crisis Group interview, Jerusalem, May 2019.Hide Footnote Elkin’s statements that “today’s Jerusalem is the demographic DNA of Israel in twenty years” and that “we must develop models for handling the challenges in Jerusalem which will help us handle the future challenges in Israel” seem in line with annexationist thinking.^[fn]Both currently and in a non-annexationist future, Israel’s Palestinian minority represents 21 per cent of Israel’s overall population (Israel counts Palestinian residents of East Jerusalem in the 21 per cent), which is roughly half the percentage of Palestinians in Jerusalem (40 per cent). “Elkin: Jerusalem – the demographic DNA”, News 2 - Hahadashot, 3 September 2018. Population statistics for Israel and East Jerusalem: “Israel's population 8.972m on eve of 2019”, Globes, 31 December 2018; “East Jerusalem”, B’Tselem, 27 January 2019.Hide Footnote Likud MK Tzipi Hotoveli has been advocating gradual rollout of the annexation and naturalisation paradigm, saying: “We must bear in mind that this [Palestinian population] is a hostile entity and it is impossible to turn them into citizens overnight. There is an intermediate phase of residency that can serve as a sort of candidacy period for citizenship. The drastic step of immediate citizenship for a million and a half Palestinians would be irresponsible and to think of doing such a thing is not serious”.^[fn]“Hotoveli Presents: The Gradual Plan – ‘Annexation – Naturalization’”, Sovereignty, no. 2 (January 2014), p. 4. A settler leader who supports annexation of the West Bank (which he referred to as Judea and Samaria) and naturalisation of all its inhabitants said he views such an eventuality positively because “Israel’s interest is to grant all West Bankers permanent residency. It gives them the right to apply for citizenship. But how many have actually applied [for citizenship] in East Jerusalem? Judea and Samaria’s Arabs would act the same”. Crisis Group interview, Jerusalem, November 2018.Hide Footnote

Even if a narrow right-wing coalition similar to that in place from 2015 comes to power, a shuffling of the ministerial deck might, for example, place the interior ministry or justice ministry in new hands, opening up other avenues to change in East Jerusalem. The former ministry controls residency request approvals and residency revocations; the latter controls Israel’s Land Registry. Furthermore, as noted above, the Israeli government had postponed implementation of some Jerusalem policies – such as the Greater Jerusalem Law – out of deference to the Trump administration, which feared they would disrupt its peacemaking efforts. Such policies could be revived if the U.S. peace plan fails to gain traction among Palestinians as is widely expected.

President Trump’s recognition of Jerusalem as Israel’s capital has reversed decades-old stated principles of U.S. peacemaking and emboldened Israeli decision-makers to take steps to consolidate control over East Jerusalem. Not surprisingly, Palestinians feel deeply threatened in Jerusalem. Arabs and Muslims continue to be united around the demand that East Jerusalem, including much of its Old City and surrounding areas, be Palestine’s capital. Mounting tensions at the Holy Esplanade exacerbate their sense that this envisioned future is growing less likely.^[fn]The unravelling of understandings that Prime Minister Netanyahu quietly reached with King Abdallah of Jordan in 2014 and 2015 over access to the Haram al-Sharif/Temple Mount, which had a decisive role in quelling the so-called knife intifada, makes the calm in Jerusalem even more precarious. See Crisis Group Briefing, How to Preserve the Fragile Calm at Jerusalem’s Holy Esplanade, op. cit. In July 2018, Netanyahu formally removed the ban on MK visits to the holy site, allowing a visit every three months, and in November 2018 increased the frequency of visits to monthly. Since mid-2016, Temple activists have lauded Internal Security Minister Gilad Erdan for allowing them unprecedented visitation rights. Temple activists report that since Erdan introduced these new policies, the police have tolerated quiet individual Jewish prayer at the site, in spite of the non-Muslim prayer ban to which Israel publicly committed as part of the historical Status Quo. Crisis Group interviews, Temple activists, Jerusalem, June 2016-November 2018. More recently, a crisis over a building on the Holy Esplanade ratcheted up tensions. See Crisis Group Briefing, Defusing the Crisis at Jerusalem’s Gate of Mercy, op. cit.Hide Footnote

Much depends on what coalition government emerges from the 17 September 2019 parliamentary election. In the less probable event of a coalition that is led by or includes self-defined centrists like the Blue and White party, the government might be more receptive to international calls to refrain from altering the legal status of Palestinian inhabitants of the areas between the separation barrier and Jerusalem’s municipal boundaries. On the other hand, it would also be freer to ignore any pro-annexationist objections from the Union of Right-Wing Parties to excision. It is thus at least conceivable that it be more inclined to excise Palestinian areas.

In the more likely scenario of a right-wing coalition, Israel’s international partners could argue to both the opposition and putative centre-right parties in the coalition, such as Kulanu or perhaps Israel Beitenu, that it is in Israel’s strategic interest to block excision of Palestinian areas and press the government to discard the five-year plan’s most inflammatory components (East Jerusalem land registration and Palestinian adoption of Israeli curricula). These parties might be receptive to the argument that excision could lead to large-scale movement of Palestinians from areas beyond the barrier into the city centre, the spread of crime westward to Jewish population centres, and heightened risks of violent escalation – all outcomes that would harm Israel’s interests. They might also be persuaded that East Jerusalemites oppose land registration so strongly that imposing it might cause unrest. Lastly, they might be swayed by the fact that local Muslim religious authorities reject the idea of Palestinians adopting Israeli curricula.^[fn]For details about the religious ruling that excommunicates those who accept the incentives and shift to the Israeli curricula, see fn 58.Hide Footnote That policy is feeding religious tensions in Jerusalem, with adverse consequences for all sides.^[fn]One partial step the Israeli government could take, short of full cancellation of land registration, would be to merely map land plots, which would not affect determinations about who owns the land. An Israeli decision-maker could say that mapping (rather than registration) represents gradual progress toward land reform, without addressing actual ownership issues. The mapping would only take place for lands that have already been authorised in a parallel planning process but have not yet been registered. Though mapping these lands would be much less harmful than registering them, it is hard to imagine how the introduction of maps of land ownership would not exacerbate existing land disputes and create new ones. Maayan Nesher, “Illegal Construction, Blood Feuds and Two Billion Shekels a Year: The Cost of Absence of Land Rights in East Jerusalem”, Jerusalem Institute for Policy Research, 2018, p. 73.Hide Footnote

Palestinian leaders may well decide to collectively boycott the land registration process, much as they have done by refusing to accept Israel’s material incentives for shifting Palestinian schools to Israeli curricula. Opponents of Israel’s deepening de facto annexation of East Jerusalem may follow suit. Turkey and Jordan could impede the land registration process to some extent by preventing Israel and individual land owners from accessing the deeds they possess to lands in Jerusalem, notably in the Old City and its immediate environs, in support of such a boycott. Historical Western sponsors of churches could similarly support a boycott in order to pre-empt land registration that would likely affect the large number of church properties owned by foreign states in Jerusalem, and fear Israeli expropriation.^[fn]Nazmi al-Jubeh and Daniel Seidemann, “Land Use and Ownership in the Old City”, in T. Najem, M. Molloy, M. Bell, and J. Bell, eds., Contested Sites in Jerusalem: The Jerusalem Old City Initiative (New York, 2018), pp. 152-153. Jubeh and Seidemann’s analysis of the enormous complexities of land registration in the Old City includes the following: “The property ownership issue in the Old City of Jerusalem is extremely complicated … mainly due to the intermingling and fragmentation of ownership and the complex categories of property rights – from endowments to protected tenancies – that have evolved throughout the centuries. Complicating things further is the fact that many Old City property owners have been absent from Jerusalem since 1967. Owing to tenant protection laws, these owners derive little in the way of financial benefit from their properties, which in turn has made some landlords accord little importance to their property. In addition, some have simply refused to deal with Israeli courts”. Two European diplomats said that Christian institutions in Jerusalem that their countries support – a monastery and a hospice – have faced legal challenges to their ownership over the historic lands on which the institutions are located and may not succeed in defending against them. Crisis Group interviews, Jerusalem, February, March 2019.Hide Footnote

At the same time, Palestinian leaders in Jerusalem should consider seizing upon Israel’s departure from its longstanding neglect of Arab East Jerusalem to explore low-profile cooperation in addressing shared challenges. Some instances of cooperation have become public, though both sides wish to keep such efforts inconspicuous, and thus deny the reports.^[fn]“For a historic project in Jerusalem: secret cooperation between Israel and the Palestinian Authority”, Channel 13, 23 April 2019. According to the same report, the Jerusalem municipality directly cooperated with al-Quds University and the Islamic Waqf, and indirectly with the Palestinian Authority, in order to repair Hezekiah’s pool in the Old City’s Christian Quarter. The Jerusalem Development Authority explained the story as “public consultations”, acknowledging that an architect employed by residents would work alongside the project’s architect. An Israeli civil society activist involved in organising the coordination confirmed the veracity of the report, noting that additional cooperation is possible as long as the media stay away. Crisis Group interview, Jerusalem, 2 May 2019.Hide Footnote In the less probable event of a coalition that is led by or includes self-defined centrists like the Blue and White party, the reconstituted Waqf Council, which is now more representative of Palestinian society in East Jerusalem, might conceivably obtain Israel’s permission to help establish and provide diplomatic cover to a subsidiary institution whose task would be to extend some municipal services to Palestinians and perhaps one day act as the embryo of an East Jerusalem municipality.^[fn]Crisis Group interview, Waqf Council member, Jerusalem, 24 April 2019. For further details on the reconstituted Waqf Council, see Crisis Group Briefing, Defusing the Crisis at Jerusalem’s Gate of Mercy, op. cit.Hide Footnote Though Israel would have many reasons to reject such an arrangement, seeing it as a step toward Palestinian sovereignty in Jerusalem, it is not impossible to imagine that it could accept it under certain conditions.^[fn]These would likely include a Waqf commitment to refrain from using such an institution to support diplomatic campaigns, legal challenges or popular protests against Israel. Many Palestinians in Jerusalem believe that gestures toward Israel by Palestinian leaders and the PLO have done little to change Israel’s drive to retain all of Jerusalem, despite some small Israeli steps to relax the ban on PA activities in Jerusalem (eg, in 2019, Israel allowed the PA’s Jerusalem affairs minister to administer Ramadan-related activities at the Haram al-Sharif, supervising PA-sponsored information and medical services inside the compound). Crisis Group interview, Waqf official, Jerusalem, 18 May 2019. The PLO has argued that establishing a Palestinian state with East Jerusalem as its capital would make Palestinians more accepting of Jewish connections to the city. “PLO envoy: a Palestinian state would ‘celebrate Jewish connection to Jerusalem’”, The Times of Israel, 16 April 2018. But these PLO efforts to persuade Israel of the benefits of allowing Palestinians to have a capital in Jerusalem have borne little fruit thus far.Hide Footnote

The EU and relevant Arab states should use whatever leverage they have with Israel to discourage excision of Palestinian areas and press Israel to discard or indefinitely postpone its five-year plan’s most provocative components (East Jerusalem land registration and Palestinian adoption of Israeli curricula). European states could, for example, warn that excision would bring them closer to recognising the State of Palestine, with East Jerusalem as its capital, and that Israeli annexation of parts of East Jerusalem would certainly bring about such recognition. Together with Arab countries, they could provide financial incentives for Israel to shelve policies that advance the de facto annexation of East Jerusalem. These incentives could include discreet offers to provide support for PA activities in areas of Jerusalem east of the separation barrier and to invest in these areas on condition that Israel relax its ban on PA activities in the city.^[fn]An Israeli expert said this policy might be more feasible in the area of Kafr Aqab, due to its proximity to PA institutions in Ramallah. The location of the Shuafat refugee camp, adjacent to the settlements of Pisgat Ze’ev and French Hill, may make Israel more reluctant to allow PA operations there. Crisis Group interview, Amnon Ramon, senior researcher, Jerusalem Institute for Policy Research, Jerusalem, 22 May 2019. One of the most pressing needs in East Jerusalem, the lack of urban planning, is one that the PA could address. A Palestinian resident of Kafr Aqab lamented the utter absence of such planning, resulting in a lack of public facilities and spaces and raw sewage flowing in the streets. “The Palestinian Authority is not my cup of tea but someone must come in, conduct serious planning and enforce it before this place is cluttered beyond repair. Israel hasn’t [done it]; it should at least allow Ramallah” to do so. Crisis Group interview, Jerusalem, 26 May 2019.Hide Footnote They could also include funds to help Palestinian Jerusalemites establish civic leadership bodies that will attempt to operate both east and west of the separation barrier.

Such investments in East Jerusalem would come at a political cost to Israel – undermining the notion of Jerusalem as the country’s undivided capital – but they can help mitigate the spread of militancy, curb the negative impact of decades of neglect such as crime that spills over to West Jerusalem, and create a mechanism for addressing conflict in East Jerusalem. As poverty, despair and instability increase in East Jerusalem, especially in areas adjacent to large Israeli settlements, so, too, may Israel’s willingness to consider making such trade-offs.

One should not expect interactions to be harmonious: Palestinians will push for more autonomy and attempt to reject certain Israeli policies, while Israel will impose restrictions on Palestinian authority and promote policies that it favours. But though Israel will be the final arbiter of policy in East Jerusalem so long as it continues to occupy it, Israelis will have to make some concessions to the 40 per cent of the city’s inhabitants who are Palestinian if they want to lessen the chance of chronic and possibly escalating unrest.

In the less probable event of a governing coalition that is led by or includes self-defined centrists like the Blue and White party, Israel could and should consider going farther – ending its ban on the establishment of an East Jerusalem municipality with which it could cooperate west of the barrier, possibly by casting such an event as part of the standard Israeli practice of encouraging public participation in urban planning. (Israel would almost certainly refuse to allow an East Jerusalem municipality to operate east of the barrier, though it is unclear how capable it would be of enforcing a ban in areas where it has little presence.)

And, whatever coalition emerges from the September elections, in order to mitigate the lawlessness, poverty and crime in the areas of East Jerusalem lying east of the barrier, Israel should relax its ban on PA activities there.^[fn]The PA intermittently operates both its security and police forces in these areas, usually with the knowledge of Israel’s authorities, carrying out counter-terrorism operations as well as erratic traffic control. Unable to operate directly, the Jerusalem municipality hires Palestinian sewage treatment subcontractors from the West Bank. Israel blocks the PA’s repeated attempts to advance policies in virtually all other fields.Hide Footnote Instead of prioritising the dire problems in the neglected areas east of the barrier, the five-year plan appears to continue to ignore them.^[fn]Israeli activities in Shuafat refugee camp since late 2018, though very modest compared to the scope of neglect, are possibly an exception to the rule of ignoring these areas. For details see fn 49.Hide Footnote These areas will likely deteriorate further, becoming potential breeding grounds for militancy, poverty, drug abuse, crime and ill health, all of which will affect the rest of Jerusalem. With Israel unwilling to assume responsibility in these areas, it should be in its interest to allow the PA to do so.

Jerusalem is at the core of both Palestinian and Jewish national identities. Without resolving competing claims to Jerusalem, there can be no Israeli-Palestinian peace. Israeli unilateral changes will only breed resentment and increase risk of violent conflict. Regardless of how the conflict in the city is resolved, Jerusalem residents, as well as both governments, could benefit if Israel were to have a Palestinian interlocutor on both sides of the separation barrier.

Whatever coalition emerges from the September 2019 elections, the next Israeli government almost certainly will seek to further Israel’s hitherto incomplete annexation of parts of occupied East Jerusalem by continuing to implement the five-year plan, now in its second year. As part of this broader socio-economic plan, which marks a shift away from longstanding neglect of Palestinian-populated areas in East Jerusalem, Israel appears intent on advancing two particularly harmful policies: cataloguing all occupied East Jerusalem lands in the Israel Lands Registry and inducing Palestinian schools in East Jerusalem to adopt Israeli curricula. Likewise, seeking to preserve a Jewish majority in Jerusalem, the next government may well decide to excise Palestinian areas east of the barrier, placing them in separate Israeli administrative units outside the municipality’s jurisdiction.

These unilateral policies would exacerbate the conflict in and over Jerusalem. They would harm hundreds of thousands of Palestinians in East Jerusalem, particularly the more than one hundred thousand Palestinians in areas Israel may excise, and present a perilous precedent for Israeli annexationist ambitions in the West Bank. All stakeholders opposed to such a move should do what they can to halt these policies as a first step toward reversing Israel’s de facto annexation of East Jerusalem.

Jerusalem/Brussels, 12 June 2019

In May 2018 the Israeli cabinet adopted a five-year plan for occupied East Jerusalem, known as “Narrowing Socio-Economic Gaps and Economic Development in East Jerusalem”. The plan’s main components are as follows:

Education and Academic Education. The state is to allocate resources to advance the following four educational objectives in East Jerusalem: deepening knowledge of the Hebrew language; advancing technological education; increasing the scope of informal, extra-curricular education; and encouraging East Jerusalem public schools to use Israeli curricula.^[fn]Israeli leaders repeatedly claim that Palestinian textbooks contain incitement against Israel and indoctrination encouraging youngsters to dream of martyrdom for the Palestinian cause. In October 2018, the Israel’s Strategic Affairs Ministry published the first monthly report regarding purported Palestinian incitement. “Strategic Affairs Ministry: Palestinian incitement against Israel rising”, Jerusalem Post, 25 October 2018. The Israeli government uses the term “incitement” expansively and tends to avoid critically examining its own textbooks. Research carried out by a joint Israeli-Palestinian research team examining both Israeli and Palestinian textbooks for incitement faulted both sides for presenting unilateral historical narratives that present themselves in a positive light and the other as an enemy, as well as for lacking information about the other’s religion, culture and daily activities. It emphasised that these phenomena were “more pronounced in the Israeli ultra-Orthodox and Palestinian books than in the Israeli state books”. Bruce Wexler et al., “Victims of Our Own Narratives? Portrayal of the ‘Other’ in Israeli and Palestinian School Books”, Council of Religious Institutions of the Holy Land, 4 February 2013.Hide Footnote The state will use roughly half of the 445 million shekels allocated for education exclusively for upgrading physical infrastructure and improving pedagogical support for schools that teach Israeli curricula.^[fn]In 1969, Israel attempted to impose the Israeli curriculum on East Jerusalem’s Palestinian schools. East Jerusalem Palestinians deflected the move with a months-long school strike that ended when Israel desisted, allowing East Jerusalem teachers to continue using the Jordanian curriculum. After the 1993 Oslo agreement, the Palestinian Authority replaced the Jordanian curriculum with the PA’s. Though the number of East Jerusalem’s pupils taught the Israeli curricula remains small, standing at less than 6 per cent in 2018, it has been slowly growing in recent years. “Israeli kids head back to school; uptick in Palestinians studying for Israeli end exams”, Haaretz, 1 September 2018.Hide Footnote Israeli universities and academic colleges in Jerusalem are eligible to receive funding if they show increased enrolment of East Jerusalemites. The plan also allocates funds to establish programs for high-achieving East Jerusalem students. One such program would encourage high-achieving East Jerusalem students to pursue education in Israeli academic institutions and later employment in advanced professions and the public sector – ie, the Israeli government.^[fn]In this area, the decision gives tail wind to existing trends of growing demand for education in Israeli academic institutions. Part of the increase is a result of the growing difficulty that Jerusalemites encounter in reaching West Bank universities since the erection of the separation barrier. The Hebrew University recognised the Jordanian-Palestinian A level exams (Tawjihi) as equivalent to the Israeli ones (Bagrut) for matters of admission. It set up a preparatory program (Sdara-Kidma) for native Arabic speakers from Jerusalem, with some 300 students registered for 2018. Nearly 300 BA and some 80 MA Arab students from East Jerusalem began the 2018 academic year at the university, compared to 211 and 54, respectively, the preceding year. Rector Letter – September 2018, Hebrew University of Jerusalem, 13 September 2018. On file with Crisis Group. A Palestinian lawyer from East Jerusalem remarked that “Hebrew University recognition of the Tawjihi would decrease the need to follow Israeli curricula”. Crisis Group interview, Jerusalem, September 2018.Hide Footnote

Economy and Employment. The government decision recommends the immediate approval of plans to develop industrial and employment areas in East Jerusalem, which are to comprise at least 260 dunams (0.26 sq km). Another stated goal is to increase Palestinian women’s participation in the labour market, so that by 2023 it reaches 25 per cent (compared with 32 per cent for female Arab citizens of Israel).^[fn]Some 32 per cent of Arab women in Israel participate in the labour market today, compared with 14 per cent in East Jerusalem. Knesset Research and Information Center, Arab Women Employment – Data, Obstacles and Recommendations, 14 July 2015. (Hebrew), p. 2.Hide Footnote Funding will go toward job training, incentives for employers and support for entrepreneurs. Additional budgeting will provide for new day care centres, programs for at-risk youth and vocational training. Yet another stated goal is to increase the municipal tax collection from businesses by 20 per cent by 2023.^[fn]A Palestinian lecturer at al-Quds University said of this component of the plan: “Israel reaches deeper into our pockets to fund its Zionist policies”. Crisis Group interview, Jerusalem, October 2018.Hide Footnote

Transportation. The state has earmarked 500 million shekels for upgrading transportation infrastructure across and around Jerusalem, including through the occupied West Bank, like the northern section of the city’s eastern ring road.^[fn]The eastern ring road is a new road planned to run through the occupied West Bank along the city’s eastern boundary from south to north, allowing Jerusalem’s residents to travel between the city’s south east and south west, bypassing the city centre’s traffic jams.Hide Footnote It also budgets minor sums for symbolic projects: integrating into East Jerusalem’s public transport network the Rav-Kav – a “smart” card used to pay for public transportation across Israel; and a pilot project of East-West bus lines across the city.^[fn]Two separate bus companies operate in Jerusalem: one has its central bus station in West Jerusalem and serves its Jewish-majority areas, while the other has its central bus station across from the Old City’s Damascus Gate and operates bus lines across Arab East Jerusalem, as well as to the northern and southern West Bank. While Arab Jerusalemites use the former, Israeli Jews very rarely use the latter. Crisis Group observations, March-October 2018.Hide Footnote Palestinian leaders in Jerusalem and Ramallah oppose connecting Bethlehem to Ramallah through the eastern ring road, rather than through Jerusalem, as had been the case in the past. They see the route through the eastern ring road as yet another Israeli policy aiming to prevent a contiguous Greater al-Quds – a metropolitan area comprising three cities (Ramallah, Jerusalem and Bethlehem) that historically made up some 40 per cent of the West Bank’s economy and society.^[fn]Crisis Group interviews, PLO Planning Unit official, Ramallah, January 2019; former PA minister, Jerusalem, January 2019.Hide Footnote

Government and Municipal Services. The plan addresses the paucity of public spaces in East Jerusalem by allocating 82 million shekels to build sports facilities, parks, playgrounds and public buildings (preceded by land expropriations “when necessary”). It allocates over 100 million shekels for upgrading sewage and drainage infrastructure by the year 2025, and for a private contractor to conduct street cleaning until 2022, when the municipality is scheduled to take over. Palestinians in East Jerusalem have been demanding such services for decades. At the same time, there is significant popular opposition to such Israeli actions, for fear that they would weaken the quest for an independent Palestinian capital in Jerusalem.^[fn]Some Palestinian residents purposely avoid such Israeli funding schemes. A resident of Sur Baher said village youth have rejected the offer of Ramadan Dabash, chairperson of the community administration (minhal kehilati) and a Palestinian candidate running for the municipal council in October 2018, to upgrade and maintain Sur Baher’s soccer field with municipal funds. The youth secured a promise from Jibril Rajoub, head of the Palestinian Football Association, to provide them with the necessary financial resources. Crisis Group interview, Sur Baher, June 2018. In early August, the PA and the Islamic Development Bank published a tender in the Palestinian daily al-Quds for the soccer field’s renovation. The Jerusalem municipality condemned the tender and announced that “if renovation works begin at the soccer field, they will be stopped by city inspectors”. “Palestinian tender for soccer field in east Jerusalem causes ire”, Ynet, 21 August 2018. A municipality official elaborated: “Since Barkat put in place this new policy, we are competing with the Palestinian Authority over investments in East Jerusalem. They enter wherever we leave a void”. Crisis Group interview, Jerusalem, October 2018.Hide Footnote

Health. The government will allocate 30 million shekels for expanding the presence of state-supported health-care facilities (Kupot Holim) across East Jerusalem.^[fn]Whereas Palestinian residents of East Jerusalem often receive health services from Israeli hospitals, which tend to be of superior quality, virtually no Israelis are treated in Jerusalem’s Palestinian hospitals.Hide Footnote A former PA official from Jerusalem pointed out that though Israeli health services have increased in number and quality among Jerusalemites, they have also weakened East Jerusalem’s Palestinian hospitals and health clinics by drawing patients and associated revenues away from them.^[fn]Crisis Group interview, Jerusalem, November 2018. The six Palestinian hospitals of East Jerusalem have had a central role in health care for West Bankers and Gazans, particularly the provision of advanced tertiary referral care, which the PA’s Health Ministry was unable to provide. Though the PA Health Ministry continues to refer patients to these hospitals, since Israel erected the separation barrier in the early 2000s these institutions grew weaker, as Palestinian access to the city was limited and revenues were lost. The hospitals absorbed another blow when the U.S. cut its annual $25 million for them on September 2018. The PA pledged to fill half this budgetary gap. “Palestinian government to compensate Jerusalem hospitals for US cut”, Ma’an News, 6 November 2018.Hide Footnote

Land Registration. The five-year plan has earmarked 50 million shekels to advance the registration of lands in Arab East Jerusalem, of which 90 per cent are not catalogued in Israel’s land registry.^[fn]The policy is based on a Jerusalem Institute for Policy Research policy paper, published in cooperation with the Finance and Justice Ministries, regarding “the economic impacts of a land arrangement in East Jerusalem”. It calls for complete registration of 50 per cent of the unregistered lands in East Jerusalem by 2021 and 100 per cent by 2025. The report lists purported advantages for both the Palestinian residents and the government and municipality. Residents cannot prove ownership over their property, cannot secure a mortgage, frequently encounter (often violent) legal disputes, and confront document forgery and land theft. Each year, Palestinian society in East Jerusalem loses between 630 million and 1.4 billion shekels, roughly 80,000 shekels per family, because no one can secure a mortgage. The residents also suffer from the great difficulty the municipality faces in identifying lands for public use, like building schools or paving roads. The state and the municipality lose at least 300 million and 250 million shekels, respectively, each year in uncollected taxes. Maayan Nesher, “Illegal Construction, Blood Feuds and Two Billion Shekels a Year: The Cost of Absence of Land Rights in East Jerusalem”, Jerusalem Institute for Policy Research, 2018.Hide Footnote The plan advises Israeli decision-makers to use higher taxes collected from Arab areas for the benefit of East Jerusalem’s Arab population and to use identified absentee lands to address Palestinian public needs rather than hand them over to settler organisations.