OXFAN: "... Israel's controversial policies will ensure that the two-states solution is never realized..."

OxfAn: Excerpts:

"...Much of the international attention on the Israeli-Palestinian conflict is focused on issues such as the blockade of Gaza, the stalled negotiations and the settlement 'freeze', and Palestinian 'state-building' efforts. Yet it is Israeli policy in East Jerusalem that could pose the most serious challenge to the efforts at creating a two-state solution, and could derail the entire peace process....

Although since Oslo, Jerusalem has been considered a sensitive 'final status' issue -- to be put aside in negotiations until other, easier, issues are settled -- the acceleration of Israeli policies in East Jerusalem threatens to undermine fatally the peace process.

Recent developments. There are a number of flashpoint locations in East Jerusalem. Attention has recently been on the following:

• In the Palestinian neighbourhood of Sheikh Jarrah, Jewish settler groups are engaged in a process of taking ownership of Palestinian homes. Large-scale demonstrations are held, which, among others, include evicted Palestinian families and Israeli left-wing activists.
• In Silwan, the settler group Elad continues to expand its 'City of David' archaeological and tourism-focused project. The government has ordered the demolition of many homes here, but a settler-occupied building constructed without correct permits has yet to be evacuated. Jerusalem Mayor Nir Barkat has promised Jewish Israelis aggrieved at the evacuation order that 200 Palestinian homes in Silwan will also have to be demolished.

In 2009 it was revealed that the previous year had been a record for the number of Palestinians stripped of their East Jerusalem residency status by the Israeli Interior Ministry. More than 4,500 permits were rescinded in 2008, constituting a third of all revocations since 1967.

Wider context. These developments have taken place in a context of increasing settlements and a Palestinian housing shortage:

1. Exclusion from freeze. The ten-month settlement moratorium declared by Prime Minister Binyamin Netanyahu in September 2009 explicitly excluded construction in East Jerusalem. Since then, announcements of construction for new housing units in East Jerusalem settlements have provoked Palestinian anger and criticism from the international community. There are now about 190,000 Jewish Israelis in East Jerusalem settlements, which form a ring around the city.....

2. Housing shortage. The Palestinian community thus struggles with an acute housing shortage, overcrowding and underdevelopment, since even on the small fraction of land in which residential construction is allowed, individual building permits are both highly expensive and frequently denied. An estimated quarter of all Palestinian homes in East Jerusalem have been constructed without permission.

An attempt by Barkat to assuage Palestinian concerns about the housing shortage merely resulted in highlighting the problem: two-thirds of the promised units would only be completed in 20 years time, by which point there would be a 74% deficit in Arab housing. In 2009, 900 demolition orders were issued to Palestinian residents of East Jerusalem, with dozens carried out.

3. Separation Wall. Israel's Separation Wall has also fundamentally changed the fabric of life in Palestinian East Jerusalem. Around 50,000 Palestinians with Jerusalem ID are now the other side of the Wall. In January, the municipality's East Jerusalem portfolio official said that Palestinian neighbourhoods to the east of the Wall are "no longer part of the city". The Wall also includes on the Israeli side settlements such as Giv'at Ze'ev and Ma'ale Adumim, which lie outside the municipal boundary.

Israeli aims. Israeli government and Jerusalem city officials cite security (in the case of the Separation Wall) and legal reasons for these policies. The latter category is used to explain evictions in Sheikh Jarrah and house demolitions -- namely that the city is merely enforcing municipal law and court decisions. Yet, the political context for these policies can be best understood with reference to the stated political vision for the city:

1. Undivided capital. The Basic Law of 1980, declaring Jerusalem as "complete and united" reflects the consensus Israeli political opinion that the annexation of East Jerusalem is irreversible. Netanyahu has repeatedly affirmed that Jerusalem will not be divided...

2. Settlements. Israel has also made clear its intention of holding on to substantial settlements both in East Jerusalem, as well as nearby, such as Ma'ale Adumim. The so-called 'E1' area, between Ma'ale Adumim and Jerusalem, is now the location for an Israeli district police headquarters, the funding for which came from both the state and settler groups ...

3. Demographics. Israeli planners at state and municipal level have always been concerned with maintaining the 'demographic balance' in Jerusalem. In January 2010, Barkat described an increase in the Palestinian population in Jerusalem over 20 years from 30% to 35% as "a strategic threat". This desire to maintain a 'desired' ratio between Jew and Arab in Jerusalem shapes policies with regard to housing, the Wall, and land zoning.

Outlook. A Palestinian state without East Jerusalem as its capital will be unacceptable for any Palestinian leadership, given the profound religious, national, cultural and economic significance of the city. Leaving it to be discussed as a 'final status' issue while Israel continues to pursue its controversial policies there will ensure that the two-state solution is never realised.

There are a number of 'spark locations' in Jerusalem that could trigger a more serious outbreak of violence. The most explosive is the Haram al-Sharif (Temple Mount) compound, a target of Jewish fundamentalists and the site of Israeli restoration work at the Mughrabi Gate that is frequently contested by Muslims. There is also the possibility of provocative, large-scale house demolitions in Silwan, as well as the increasing tension in areas such as Shu'fat refugee camp whose residents must pass through an Israeli checkpoint to enter and exit.

In the absence of a strong, unifying leadership for East Jerusalem Palestinians, any protests (violent or otherwise) are likely to be spontaneous and responsive to events. The significance of such developments would be heightened in the case of continued lack of progress in the peace process, which is increasingly likely now that the issue appears to be slipping down the agenda of the US administration.

Major international actors have avoided pressing for the prioritisation of an equitable arrangement on Jerusalem. In the absence of such pressure, Israeli policies will continue and Palestinian unrest will increase, reducing the likelihood of trust-building and successful negotiations. Even in the event of progress on other issues in the peace process, conflicting visions for the city -- and in particular, Israeli desires for an 'undivided, Jewish' capital -- could prove the biggest obstacle to a final agreement on the basis of the two-state solution.