Jerusalem to Invest in Arab Areas

Jerusalem's mayor Uri Lupolianski, right, points at an aerial photograph of Jerusalem at the City Hall, Wednesday, Nov. 21, 2007. Jerusalem's mayor announced a new plan to revamp long-neglected Arab neighborhoods in Jerusalem on Wednesday, a step meant to counter growing talk of dividing the city ahead of a crucial Mideast peace conference next week. (AP Photo/Sebastian Scheiner) (Sebastian Scheiner - AP)

JERUSALEM -- The mayor of Jerusalem announced a plan Wednesday to revamp long-neglected Arab neighborhoods, a step meant to counter growing signs that Israel's leadership is willing to consider ceding parts of the city to the Palestinians.

The news from Mayor Uri Lupolianski appeared timed for release before a crucial Mideast peace conference in Annapolis, Md., next week meant to relaunch talks on an Israeli-Palestinian peace agreement, and any such agreement will necessarily mean sharing Jerusalem.

"Today, unfortunately, people are busy talking about Jerusalem," Lupolianski said at a news conference. "Through our actions, we will unify and strengthen Jerusalem."

Lupolianski termed the initiative the "Marshall Plan for east Jerusalem," referring to the successful U.S. aid program for Europe after World War II, and said it was meant to correct years of neglect.

Israel captured east Jerusalem from Jordan in 1967 and annexed it. Today, around one-third of the city's 750,000 residents are Palestinians, living in east Jerusalem neighborhoods that lag far behind Jewish areas in employment, infrastructure and education. Palestinians said the new plan would do little to change that.

The plan will see the city invest around $51 million in the central neighborhoods of east Jerusalem, sprucing up the area's underdeveloped commercial center, building parks and hotels, allowing more construction of businesses and homes, and creating closer links with Jewish areas of west Jerusalem, Lupolianski said.

Planners have been at work on the projects for the past year, Lupolianski said. But they are still in the early planning stages and need approval from local and regional authorities. That process could take months or years.

Israeli and Palestinian leaders are set to meet in Annapolis to restart talks on a peace agreement, and Jerusalem is perhaps the thorniest issue facing them. Palestinians want east Jerusalem as the capital of a future state, meaning Israel would have to agree to divide or share the city.

Israel claims the entire city as its capital. The most contentious area is the Old City, home to a disputed holy site at the heart of the Israeli-Palestinian conflict.

The compound is known to Jews as the Temple Mount, Judaism's holiest site, revered as the site of two biblical temples. The same compound houses the Al-Aqsa mosque, Islam's third-holiest site and a potent national symbol for Palestinians.

Israeli Prime Minister Ehud Olmert has indicated he might be willing to cede some of the city's peripheral Arab neighborhoods, but that position remains far from the Palestinian demand for control over all of east Jerusalem.

Beyond Israel's emotional attachment to the city, Israelis are concerned that any areas vacated might be taken over by militants, putting Palestinian gunmen just steps away from Jewish neighborhoods.