Israel to develop Jewish areas of Jerusalem

JERUSALEM (AFP) - Israel on Sunday allocated one and a half billion dollars to develop Jewish areas of Jerusalem as the mayor warned the rising Arab population could sever Jewish sovereignty over the holy city.

At a special cabinet session marking 40 years since what Israel calls the "reunification" of Jerusalem, Prime Minister Ehud Olmert said the government would approve a series of plans to develop the city, spending 5.75 billion shekels (1.45 billion dollars) and announcing tax cuts as incentives.

Israel captured Arab east Jerusalem on June 7, 1967, the third day of the six-day Middle East war, and unilaterally annexed the sector in a move not recognised by the international community.

The approved measures, condemned by the Palestinian government, include tax cuts to encourage public investment, moving all government offices to Jerusalem, building a new court complex and a new centre for Jerusalem studies.

Jerusalem mayor Uri Lupolianski told the cabinet meeting that Jerusalem's Jewish population should be strengthened.

"The demographic problem is a very difficult one for us. According to statistics, even though we talk about Jewish sovereignty, Jerusalem may not remain for eternity under Jewish leadership and sovereignty," Lupolianski said.

"Jerusalem might fall in the hands of Hamas which knows that it doesn't have to conquer Jerusalem by war but through demographic means. Hamas knows that within 12 years it could take over Jerusalem through the demography."

An Israeli research institute has reported that while the number of Jewish residents grew 140 percent to 475,000 over the last 40 years, the city's Arab population has grown far more quickly, by 257 percent to 245,000.

Olmert chaired the meeting at the Menachem Begin Centre, named after the late right-wing premier whose government pushed through a law in 1980 declaring Jerusalem "the unified and eternal capital of Israel".

Palestinians are determined to make east Jerusalem, which includes the walled Old City and its holy sites, the capital of a promised future state, and government spokesman Mustafa Barghuti slammed the latest spending allocations.

"It is an announcement against peace and against the Palestinian state and it means the Israeli government is not a partner for peace," he told AFP in the West Bank political capital of Ramallah.

"I consider this a dangerous Israeli escalation in conjunction with the latest announcement that 20,000 housing units will be built.

An Israeli newspaper last week disclosed plans to build three new Jewish neighbourhoods around Jerusalem in the occupied West Bank.

Israel will on Wednesday mark the 40th anniversary of "reunification" in keeping with the Hebrew calendar, but the commemorations have courted controversy, particularly a special parliamentary session on Monday.

The German embassy whose country is president of the European Union declined invitations on behalf of EU diplomats to attend the session.

American ambassador Richard Jones is not scheduled to attend either, a US diplomatic source told AFP.

Although the diplomatic corps is generally absent from annual Jerusalem Day events, Israel's foreign ministry said it "regretted" that EU representatives would not be attending the "important event" at the Knesset.

Israel's Peace Now organisation slammed the planned public celebrations as divorced from reality, fodder to encourage Arab extremists to attack and damaging for peace campaigners on both sides.

"The fact is that Jerusalem is not recognised as the capital of Israel by the world because of the occupation in east Jerusalem and as a matter of fact Jerusalem is still divided," director general Yariv Oppenheimer told AFP.

"This celebration is disconnected from reality and also encourages extremists in the Arab world to fight Israel because of this very public show of force by the Israeli government," he added.

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