Immediately after last November's Annapolis conference, Israel declared its intention to construct 307 new housing units in the Har Homa settlement in occupied East Jerusalem, in addition to building new settlements in the Almatar and Sheikh Jarrah areas of the city. Thus, Israeli Premier Ehud Olmert--who announced before the conference that he had ordered a freeze on all construction in West Bank settlements--started a battle even before negotiations had got under way. He justified the building in Jerusalem by claiming that the city should be considered a part of Israel and thus exempt from any freeze.

Israel occupied and annexed East Jerusalem in 1967. In 1980, the Israeli parliament passed what it called the Jerusalem Law, which considers Jerusalem the "eternal and indivisible capital of Israel". However Israel alone holds this position. UN Security Council Resolution 478 deemed the Jerusalem Law "null and void" and determined that it "must be rescinded forthwith". According to international law, the situation is quite clear: Jerusalem is part of occupied territory to which Geneva conventions prohibit Israel from moving its civilian population and on which the Hague conventions ban it from undertaking permanent changes. No country, including the United States, has recognized Israel's annexation and no embassies are located in the city. Nevertheless, Israel has pressed ahead with its settlement project.

Despite Olmert having agreed with the Palestinian leadership under Palestinian Authority President Mahmoud Abbas to resume final status negotiations, it is therefore apparent that he is not yet willing and/or confident enough to include Jerusalem, one of the most important final status issues, in these talks. This was made explicit in his agreement with the religious Shas party not to discuss the fate of the city. Shas, which holds 12 Knesset seats and is thus a vital coalition partner in Olmert's government, threatened otherwise to withdraw from the coalition and thus potentially bring down the government. Moreover, this position means that Olmert is also not ready to abide by the roadmap agreement--which dictates a freeze on "all settlement activity, consistent with the Mitchell report, including natural growth of settlements"--as was agreed at Annapolis.

Meanwhile, Israel continues to ban any PA activity in Jerusalem and refuses to re-open the city's Palestinian institutions, including Orient House and the Arab Chamber of Commerce, which were closed after the eruption of the Aqsa intifada. In the long run, furthermore, Israel's Jerusalem municipality plans to reduce the number of Palestinians in the Old City as part of its Jerusalem Master Plan 2000 that seeks to "develop" the city as "a center for the Jewish people and a seat for its government", in order to achieve a "long term goal that reflects the future vision for the city as conceived by the city fathers".

This Israeli unilateralism in Jerusalem is clearly preparation for the implementation of the Clinton doctrine that "what is Jewish will remain for the Jews and what is Arab will remain for the Palestinians" in any future agreement over the city. In other words, by ignoring international law and any and all UN resolutions related to the Arab-Israel conflict, Israel is working hard to secure itself as large a slice of the Jerusalem pie as it can.

On its part, a divided and weak Palestinian side is unable to exert any pressure to force Israel to stop its unilateralism. The peak of recent Palestinian activity regarding the city was last month's Popular Conference for Jerusalem (which was held in Ramallah). At the conference President Abbas declared that, "we want Jerusalem to be our future capital and we will not accept other than that.... Regardless what [Israel] did or intends to do and whatever they do to change its features, the holy occupied Jerusalem is the capital of our state and we will not cede it." Organizers of the conference hoped to organize and direct Palestinian efforts against Israeli measures and practices in the city. But Palestinians--who now control only 14 percent of their land in the city--face an uphill battle.

Jerusalem, which was the spark for the second Palestinian intifada during which thousands of Palestinians and hundreds of Israelis were killed and injured, remains the key to peace in the region. However, peace can only be achieved if Israel ceases to act as a settler state and moves to build trust instead of settlements. Since Israel has failed to do so in the past 40 years of occupation, it is time for the international community to act to end Israel's monopoly over the spiritual capital of the three major monotheistic religions. In fact, Jerusalem is not a Jewish city and thus cannot be the eternal capital of the Jewish state. If Israel continues with its current policies and measures in the city, it will become impossible to achieve a two-state solution for the conflict and the cycle of violence will continue. Ultimately, Israel will then finally have no other choice but to become a bi-national state that either functions by way of apartheid or ensures equal rights for all its citizens.