The Christian leaders said the church doors would reopen Wednesday morning.
The church, a place that draws thousands of pilgrims daily, had been closed since Sunday, when church leaders said they were protesting attempts by the Jerusalem municipality to tax church properties.
Israeli authorities backtracked Tuesday with a statement from Netanyahu’s office saying that in coordination with Jerusalem’s mayor, Nir Barkat, a professional team would be established, led by a senior government minister and representatives of the foreign and finance ministries, to “formulate a solution to the issue of municipal taxes on buildings belonging to the churches that are not houses of worship.”
In a news conference Sunday, the church leaders said they had received “collection notices and orders of seizure of church assets, properties and bank accounts for alleged debts of punitive municipal taxes.”
Later, in a joint statement, the churches said Israel was waging a “systematic campaign against the churches and the Christian community in the Holy Land, in flagrant violation of the existing status quo.”
Barkat said the churches owed the city more than $185 million on certain properties used for commercial purposes. He said houses of worship would not be taxed but properties used as hotels and offices by the church should no longer be exempt. Barkat has been locked in a dispute with the government over increasing the annual budget for the city, where a high number of residents and international institutions are exempt from taxes for various reasons.
This month, an announcement from the municipality said it would start collecting back taxes worth more than $188 million from 887 properties in Jerusalem belonging to churches and U.N. agencies. This appeared to be a tactic to pressure the government to increase the city’s budget.
The dispute between the churches and the Israeli authorities also involves proposed legislation aimed at repossessing large tracts of land leased by the Greek Orthodox Church to the Israeli government nearly 70 years ago. The land in question, which now houses hundreds of apartment buildings and national institutions, was sold several years ago by the church to private commercial developers.
The Israeli parliament is considering a bill that would prevent similar transactions and allow the government to use eminent domain on lands sold by churches in private deals.
Rachel Azaria, the Israeli lawmaker behind the legislation, said her bill was not designed to take away property belonging to religious institutions but focuses on the land the church sold off. “We have no intentions of infringing on the church’s land in any way,” said Azaria, a former deputy mayor of Jerusalem. “My bill deals with the rights on land that the church has sold to third parties.”
Azaria agreed to delay deliberations on her bill after this week’s protest by the Church of the Holy Sepulchre, saying her law would be reworded to ensure “the church is exempt from municipal taxes like all other religious institutions.”
She said Barkat was “creating an unnecessary diplomatic crisis.”
The closure of the church comes at a highly sensitive time after President Trump’s decision to recognize Jerusalem as Israel’s capital and move the U.S. Embassy from Tel Aviv. On Friday, the U.S. Embassy said that move could happen as soon as May, when Israel celebrates its 70th anniversary.
Local Muslims and Christians have said that such a move could upset the religious balance in Jerusalem, a city holy to all three Abrahamic religions. And Palestinians have said that formal recognition of Jerusalem as Israel’s capital and transferring the embassy there makes it impossible for the United States to be a fair broker in any future peace process between them and Israel.