Israeli bulldozers demolished a vacant hotel in an Arab neighborhood of East Jerusalem on Sunday, clearing the way for a new Jewish housing development that has drawn heavy Palestinian and American condemnations.
The planned construction, combined with a flare-up in Israeli-Palestinian violence, bodes poorly for a new U.S. attempt to restart peace talks later this week. The Palestinians accused Israel of "playing with fire" and undermining peace efforts.
The dispute over East Jerusalem is the most explosive issue in Israeli-Palestinian peace-making. The conflicting claims to the area, captured by Israel in 1967 and sought by the Palestinians as their future capital, have periodically spilled over into violence.
Early Sunday, construction crews knocked down the historic Shepherd Hotel, built in the 1930s as the residence of the mufti of Jerusalem at the time, Haj Amin Husseini.
British rulers subsequently exiled Husseini, and the property fell under the control of Jordan, which controlled East Jerusalem after 1948, and then to Israel in 1967. Nearly two decades later, the Israeli government sold the building to Jewish American businessman Irving Moskowitz, a longtime patron of Jewish settlers.
In 2009, after years of bureaucratic stalling, Jerusalem's hard-line mayor, Nir Barkat, issued permits to turn the site into a development of 20 apartments for Israelis. The decision came over the objections of Washington, which summoned Israel's ambassador at the time to urge Israel to halt the plan.
Descendants of Husseini still claim to own the site, and Sunday afternoon family lawyer Maher Hanna said he got a restraining order to stop construction until a hearing this morning.
"They have no right to anything here," said Inas al-Ghawi, a 38-year-old Palestinian who watched Sunday's demolition. "This is Palestinian land, but they are thieves, they steal everything."
Moskowitz has a long history of promoting Jewish housing developments in the heart of Arab neighborhoods. While his projects are legal under Israeli law, they are often seen as provocations that disrupt the city's fragile ethnic fabric.