The background and details on the current controversy of a new settlement housing project green-lighted in East Jerusalem.

Q: What does this current controversy in Jerusalem mean for peace?

The current project is a direct challenge to President Barack Obama and his effort to launch negotiations that can lead to Israeli-Palestinian and Israeli-Arab peace.  If Prime Minister Binyamin Netanyahu sees sense and finds a way to back down and cancel/freeze this project, the chances for a serious peace process, with a credible result, may very well improve.  Alternatively, Netanyahu and others may well have decided to do everything possible to use this project to deal a fatal blow not only to Obama's efforts but to the two-state solution.  If they succeed, it will be Israelis as much as the Palestinians who suffer.

Q: Where would this new settlement be? 

The site in question is the former Shepherd's Hotel, located in the heart of the East Jerusalem neighborhood of Sheikh Jarrah.  The site is not connected to any other Israeli settlement construction - if implemented, this would mean the establishment of a new settler foothold in this area. 

While the site itself is isolated from any other settlement, the plan does not exist in a vacuum.  Rather, it is part and parcel of a surge in settlement activity in Sheikh Jarrah in recent months and years.  This surge includes: 

• the displacement of Palestinians families in the Shimon Ha-Tzadik area of Sheikh Jarrah
• the promotion of a town plan for the construction of a new Jewish neighborhood/settlement in the Shimon Ha-Tzadik area
• the leasing of the Mufti's Grove site to the Ateret Cohanim settler organization (currently pending before the Israeli Supreme Court), and
• efforts to approve the construction of a headquarters building for Amana - the major organ of the West Bank settler movement - to be located across the street from the Israeli National Police Headquarters in Sheikh Jarrah.

If put into effect, these plans would create a contiguous swathe of right-wing Jewish housing cutting through Sheikh Jarrah and severing areas beyond it from the Old City and historic basin (to view or download a full-size image of the map, click here).

Q: Why is news of this project causing so much controversy?

The messages Prime Minister Netanyahu and Jerusalem Mayor Nir Barkat are sending to President Obama with the project's approval, and with their very public defiant defense of the project, are clear:  "We will do whatever we want, regardless of any other considerations" and "we view settlement activities in Jerusalem as a trump card that we can play at any time."  It is a clear statement that while mouthing support for the two-state solution, Netanyahu and his government are determined to do everything possible on the ground to undermine any chances for a viable peace process or peace agreement.   

The controversy is being framed in the Israeli press as a political showdown between Netanyahu and Obama.  Some columnists are spinning it as a trap cleverly set by Netanyahu for Obama to walk into.  Others are framing it as a bold diplomatic offensive by Netanyahu, designed to re-assert Israeli strength in the bilateral relationship.  Still others are calling it what it is:  a transparent ploy Netanyahu is using to try to end US pressure regarding settlements and outposts, and to mobilize support for his government - from Israelis and American Jews alike.  For more on this see Nahum Barnea's analysis in the July 20th issue of Yedioth Ahronoth.

Q: What is the impact of this controversy on the Palestinians and in the Arab world?

In terms of what this controversy means for other stakeholders in the peace process, the impacts are also clear.  For Abbas and the Palestinians, the approval is a slap in the face.  It further discredits President Abbas and the PA - something that is nearly certain to benefit Palestinian extremists, who will be able to position themselves as the only true defenders of Palestinian and Muslim interests in Jerusalem.

At the same time, actions like this approval will only reinforce and increase Arab distrust of Israel and the peace process President Obama is trying to catalyze,  making it even harder to convince the Arab states to deliver the sort of early normalization steps that the US views as critical to the process.  Israel and the US have for some time been complaining about Arab unwillingness to promise any normalization in advance of an actual settlement freeze.  The Shepherd's Hotel debacle offers a very good example of why, perhaps, Arab leaders are reluctant to "pony up" until it is clear that there won't be continual embarrassments and setbacks.

Q: What is the history of this site?

The site was once the headquarters of Haj Amin al Husseini, the mufti of Jerusalem during World War II, who was notoriously a Nazi sympathizer.  In the 1980's, when the property was under the control of the Absentee Property Custodian, the land was sold to a corporation controlled by American millionaire Irving Moskowitz (either directly or by means of the Amana settler organization).  Moskowitz has long been the premier financier for ideological, far right-wing settler activity in East Jerusalem, focusing primarily on the Old City and historic basin.   Given Moskowitz's involvement, any claim that this was an innocent private sector real estate transaction is disingenuous, to say the least.

The Moskowitz connection to this project is important, as this is the same Moskowitz who played an important role in Netanyahu's last major Jerusalem debacle: the opening of the Hasmonean Tunnel in 1996.  That project, too, was funded partly by Moskowitz (who personally attended the opening), and that project led to the outbreak of violence in Jerusalem and the West Bank that left 85 Palestinians and 16 Israelis dead. 

Moskowitz has been trying to develop the Shepherd's Hotel site for years, but the project has been stalled -- until now -- in all likelihood because it was viewed as politically reckless and irresponsible.  Moreover, when it has been raised in the past -- including several times under the Bush Administration -- the US and the UK expressed strong opposition and the plan was put aside.  Indeed, the Jerusalem Municipality has over the last two years periodically promised the international community that it would refrain from expediting the plan in order to allow international stakeholders to weigh in and to ensure that the interested parties were not taken by surprise.

Q: Why has the project been approved now?

Israel's political calculus has changed.  Jerusalem's new mayor, Nir Barkat, has made clear that he is unconcerned with political implications and broader political context of what he does in Jerusalem.  And Prime Minister Netanyahu appears to have decided that the project is a handy tool that he can use to torpedo the Obama Administration's efforts to launch new Israeli-Palestinian and Israeli-Arab peace efforts.

This new calculus first became evident back in March 2009, when Barkat was first on the scene but Netanyahu had yet to take the reins of government.  At that time, the Shepherd's Hotel project suddenly appeared on the agenda of the licensing committee of the Jerusalem Municipality, which was scheduled to convene and deliberate on issuing building permits (Permit Application No. 08-787) to allow for the construction of a new settlement with 20 residential units in the heart of East Jerusalem on the site of the historic Shepherd's Hotel in Sheikh Jarrah.  Following (we believe) interventions from the US and UK, the matter was taken off the agenda.

Then, on July 2, with little notice or fanfare, the licensing committee went ahead and adopted a decision to issue the permits - something that only became known on July 5, when it was reported in the Hebrew-language Israeli press.  At that time, some municipality officials denied that anything new had actually happened, while others argued that this decision did not constitute full approval of the permits, because further technical approvals were still needed (something the municipality is still saying today).  This argument is not credible: the permits are now approved and any remaining approvals are pro forma and virtually automatic.

Finally, on July 18th the Netanyahu government apparently leaked the story to the press.  Netanyahu drew further attention to the story by delivering a prepared statement on this "breaking news" at the July 19th Cabinet meeting.  Based on the way the story is being spun, the obvious conclusion is that the goal of the leak was to change the subject on the Israel-US agenda from West Bank settlements and outposts (which are not especially popular among rank-and-file Israelis) to Jerusalem - a tried-and-true populist political move by Netanyahu - whose preferred slogan in political campaigns has long been "[insert name of opponent here] will divide Jerusalem."

Q: Can the plan still be stopped? 

The plan can indeed still be stopped.  However, while a week ago it could have been stopped quietly, at little cost in terms of Israeli or US political capital, Netanyahu's decision to publicly draw a line in the sand over the plan has massively upped the ante.  At stake are the credibility of the Obama Administration's leadership in the international arena and the viability of its effort to achieve Israeli-Palestinian and Israeli-Arab peace.

Stopping this plan today can be achieved only through firm, resolute, uncompromising intervention from the highest political echelons.  The fact is, the government of Israel has great experience and expertise when it comes to holding up or stopping building permits for Arab construction in East Jerusalem.  Any arguments that that Israel cannot find a basis on which to freeze, delay, or cancel construction in this case are neither credible nor accurate. 

Q: Netanyahu has defended the plan by saying that Palestinians have the same rights as Israelis to live anywhere in Jerusalem.  Is this true?

***This analysis is now out-of-date; please look for updated analysis to follow.

No.  Defending the Moskowitz plan on July 19, Netanyahu argued passionately in a meeting of his cabinet that Israelis have the right to live anywhere in Jerusalem.   In his enthusiasm to defend the project he declared:

"This has been the policy of all Israeli governments and I would like to say that it is indeed being implemented because in recent years hundreds of apartments in Jewish neighborhoods and in the western part of the city have been purchased by - or rented to - Arab residents and we did not interfere. This says that there is no ban on Arabs buying apartments in the western part of the city and there is no ban on Jews buying or building apartments in the eastern part of the city."

Let's look at the facts.

Most of West Jerusalem is off-limits to Palestinian residents of Jerusalem in terms of their ability to purchase property.  This is because most of West Jerusalem, like most of Israel, is "State Land" (in all, 93% of land in Israel is "State Land," though the percentage is lower in Jerusalem).  Under Israeli law, to qualify to purchase property on "State Land" the purchaser must either be a citizen of Israel (Palestinian Jerusalemites are legal residents if the city, not citizens of Israel) or legally entitled to citizenship under the law of return (i.e. Jewish).  This means an Israeli or a Jew from anywhere in the world can purchase such property in West Jerusalem, but not a Palestinian resident of the city.  (Technically, by the way, these are generally not purchases but long-term leases.)

With respect to private land in West Jerusalem, legally there are no limitations on Palestinian residents of East Jerusalem purchasing in such areas.  Similarly, there are no legal limitations on Palestinian residents of Jerusalem renting in West Jerusalem. However, we are unfamiliar with a single case of a Palestinian who holds Jerusalem residency who is living in West Jerusalem, either through purchase or rental of property (and we are very familiar with this issue).  The reasons for this are social, cultural, and economic.  This is distinct, by the way, from Arab citizens of Israel, a small number of who do live in West Jerusalem.

In addition, it should be emphasized that the ban on purchase of property on "State Lands" by Palestinian residents of Jerusalem extends to East Jerusalem.  Not only are Palestinian Jerusalemites barred from purchasing property in most of West Jerusalem, but they are also barred from purchasing property in the 35% of East Jerusalem that Israel has expropriated as "State Land" since 1967, and on which Israel's East Jerusalem settlements have been built.  This means that in more than 1/3 of East Jerusalem, Israelis and Jews from anywhere in the world have a right to buy property in Israeli settlements, but not Palestinian residents of Jerusalem, including the very residents whose land was expropriated to build these settlements.

Finally, it is true that a small number of Palestinian residents of East Jerusalem have rented apartments in some East Jerusalem settlements (principally French Hill, Pisgat Zeev, and Neve Yaacov - all settlements that are so deep inside Palestinian east Jerusalem that they are increasingly less attractive to Israelis).  This does not appear to reflect any political agenda to move to these areas, but rather is a byproduct of the severe housing shortage that exists in Palestinian neighborhoods of East Jerusalem.  And it should be noted that these are short-term rentals from their Israeli owners (as opposed to formal leases by the titular land owner, the government of Israel, to Palestinians).

Q: Others have defended the plan by saying that it includes housing for both Israelis and Palestinians.  Is this true?

No.  The plan, which we have reviewed, does not include any construction for Palestinians.  The fact is, Moskowitz's entire "raison d'etre" as a force in Jerusalem over the past 30+ years has been to implant far right-wing, ideologically-motivated Jewish extremists in the heart of Palestinian areas of the Old City and historic basin, with a clear goal of displacing Palestinians and establishing the dominance of a Jewish narrative throughout the area.  Indeed, Moskowitz has stated clearly in the past that his goal is, "to do everything I possibly can to help reclaim Jerusalem for the Jewish people." This project is no different.  Indeed, the idea that Moskowitz would build housing for Palestinians in East Jerusalem is simply not credible. 

Q: It appears that the government of Israel and some right-wing forces in the US are trying to build a case that Haj Amin al Hussein's Nazi ties are sufficient justification for the project.  Is this reasonable?

No.  Husseini's Nazi sympathies are odious.  And they have nothing to do with this project today.  If Israel were concerned that preservation of this building would somehow promote the legacy of Husseini, it has had 41 years to destroy the building or re-purpose it for some other use.  It did not do so, even at times in the past 41 years when the world was paying far less attention to its actions in East Jerusalem.  It did not do so, presumably because it (a) did not consider "punitive" action against the long-dead and long-discredited Husseini a priority, and/or (b) it recognized that the site was too sensitive to play games with. 

Today's focus on the Shepherd's Hotel is about current Israeli politics, not Husseini and Nazis.  It is shameful that the Netanyahu government is abusing the Holocaust as part of the effort to defend this reckless project.  It is disheartening that the government of Israel is reportedly now circulating a photo taken of Husseini with Hitler as part of an effort to deflect criticism of the plan.  Not only does this strategy contribute nothing to justifying the plan, it cheapens discourse on the horrors of Nazism, turning Nazi imagery into a political public relations gimmick.

Netanyahu has a long history of using Jerusalem to try to destroy peace efforts, including his decision, taken immediately after returning from peace negotiations at the Wye Plantation in 1998, to build Har Homa, and, more famously, the 1996 decision to open the Hasmonean Tunnel under the Muslim Quarter of the Old City.  The Shepherd's Hotel is just the latest Jerusalem project that Netanyahu has seized on to undermine the prospects for peace and a two state solution.  The fact that Moskowitz is a central player in this affair - just as he was in the Hasmonean Tunnel debacle, lends credence to this analysis.

Produced by Lara Friedman, Director of Policy and Government Relations, Americans for Peace Now, and attorney Daniel Seidemann, Ir Amim (Israel).  Ir Amim is an Israeli non-profit organization working for an equitable and stable Jerusalem with an agreed political future.  For more information, see www.ir-amim.org.il/eng  (Hebrew site is www.ir-amim.org.il)