Israel is quietly carrying out a $100 million, multiyear development plan in some of the most significant religious and national heritage sites just outside the walled Old City here as part of an effort to strengthen the status of Jerusalem as its capital.

The plan, parts of which have been outsourced to a private group that is simultaneously buying up Palestinian property for Jewish settlement in East Jerusalem, has drawn almost no public or international scrutiny. However, certain elements related to it — the threatened destruction of unauthorized Palestinian housing in the redevelopment areas, for example — have brought widespread condemnation.

But as Pope Benedict XVI prepares to visit Christian sites here this week and as the Obama administration promotes a Palestinian state with parts of Jerusalem as its capital, Israeli activity in the area, known as the holy basin — land both inside and just outside the Old City — will be cause for growing concern and friction.

“Everything Israel does now will be highly contentious,” said Robert H. Serry, the United Nations special Middle East coordinator, on a recent tour of East Jerusalem. He warned the Israeli authorities “not to take actions that could pour oil on the fire.”

The government of Prime Minister Benjamin Netanyahu says, however, that it will push ahead. Interior Minister Eli Yishai said last week of the activity in one core area: “I intend to act on this issue with full strength. This is the land of our sovereignty. Jewish settlement there is our right.”

As part of the plan, garbage dumps and wastelands are being cleared and turned into lush gardens and parks, now already accessible to visitors who can walk along new footpaths and take in the majestic views, along with new signs and displays that point out significant points of Jewish history.

The parts of the city that are being developed were captured in the 1967 Middle East war, but their annexation by Israel was never recognized abroad.

At the same time, there is a battle for historical legitimacy. As part of the effort, archaeologists are finding indisputable evidence of ancient Jewish life here. Yet Palestinian officials and institutions tend to dismiss the finds as part of an effort to build a Zionist history here.

In other words, while the Israeli narrative that guides the government plan focuses largely — although not exclusively — on Jewish history and links to the land, the Palestinian narrative heightens tensions, pushing the Israelis into a greater confrontational stance.

The holy basin is an infinitely complicated landscape dotted with shrines and still hidden treasures of the three major monotheistic religions. The Christian sites, like the site known as the Garden of Gethsemane, where Jesus was betrayed and prayed the night before his crucifixion, are run by various churches. An ancient Muslim cemetery is the property of an Islamic religious authority, the Waqf.

The government development plan was first agreed upon in 2005 “to strengthen the status of Jerusalem as the capital of Israel,” as it states in its opening line, and became operational in the past year, with the prime minister’s office and the municipality jointly responsible.

But no one in either office or from the private group, known as Ir David, or City of David, agreed to be interviewed over weeks of requests, reflecting the delicacy of the matter. Some written responses were provided.

The tenor of those responses is that the improvement of the holy basin is for everyone’s benefit — Jews, Muslims and Christians — since it involves restoration that will draw more visitors to an area of exceptional global interest that has long suffered neglect.

The answers also made clear that Israel has no plans to negotiate yielding the area.

As an official in the prime minister’s office put it in his answer: “Jerusalem has been the eternal capital of the Jewish people for some 3,000 years and will remain the united capital of the State of Israel. Under Israeli sovereignty, for the first time in the history of Jerusalem, the different religious communities have enjoyed freedom of worship and the holy sites of all faiths have been protected.

He continued: “The government will continue to develop Jerusalem, development that will benefit all of Jerusalem’s diverse population and respect the different faiths and communities that together make Jerusalem such a special city.”

Israeli officials point out that when East Jerusalem was in Jordanian hands from 1949 to 1967, dozens of synagogues in the Jewish Quarter were destroyed, Jewish graves were desecrated and Jewish authorities were largely denied access to the Western Wall or other shrines. By contrast, in Jerusalem today Muslim and Christian authorities administer their holy sites in a complex power arrangement under Israeli control.

The Jerusalem municipality has just introduced a separate, complementary 20-year plan that it says is aimed at increasing green space, tourist complexes and new housing for Palestinians in areas away from the historic sections.

The focus is clearly on Jewish heritage, however. In the larger government plan, much of the presentation is being shaped by a group with a right-wing Zionist approach, emphasizing ancient Jewish religion and history, even near mostly Palestinian neighborhoods.

Hagit Ofran of Peace Now, a leftist Israeli group that opposes Jewish settlement in Palestinian areas and supports a two-state solution, contended that the plan aimed to create “an ideological tourist park that will determine Jewish dominance in the area.”

Daniel Seidemann, the founder of Ir Amim, or City of Nations, an Israeli association dedicated to sharing Jerusalem, noted that strategically located Palestinian properties bought by Ir David and other settler groups were to be linked by the new state parks, creating a belt around the Old City that will make it harder than ever to divide Jerusalem as part of a two-state solution.

He said “the DNA of the settler organizations is informing government decisions” while “government powers are being handed over to the settler organizations.”

Mr. Seidemann points in part to the Palestinian village of Silwan, which was built on the ruins of what is widely believed to be the ancient capital of the biblical King David.

Silwan spills down the steep slopes south of the Old City wall, in the shadow of the Temple Mount and the steely dome of Al Aksa Mosque. The Wadi Hilwe section, in Silwan, which houses thousands of Palestinians in cramped quarters, sits on an ancient ridge where King David is said to have conquered an existing stronghold and laid the foundations of Jewish Jerusalem 3,000 years ago.

It is one of the most important archaeological sites in the region, and is, according to Ir David — which sponsors digs there and brought in some 400,000 visitors last year — “the place where it all began.”

It is also the place where Ir David began, taking over its first houses in 1991 under the name Elad (a Hebrew acronym for “to the city of David”). The group says that it now owns dozens of assets in the area, and that close to 500 Jews live around the site.

It also runs an archaeological sifting center at Zurim Park northeast of the Old City in a joint project with the government-financed Israel Nature and Parks Authority, Bar-Ilan University and the Israel Antiquities Authority.

At the Mount of Olives, which includes an ancient Jewish cemetery, Ir David has opened an information center and has set up a Web site mapping all the graves, running ahead of the government’s own plans. It also runs tours of an ancient aqueduct farther to the south.

A spokeswoman for the parks authority, Osnat Eitan, was unable to explain how some of its sites came to be contracted out to a settler group. Some point to the fact that Eviatar Cohen, the parks authority official responsible for the Jerusalem district, used to be an employee of the group. Ms. Eitan said her organization cooperated with bodies on the basis of how they could advance the parks authority’s goals.

Among archaeologists, there is keen consternation about Ir David’s role because of its strong Jewish focus, which many view as a politicized betrayal of the neutral role of scholarship.

Raphael Greenberg of Tel Aviv University, for example, wrote in the February issue of Public Archaeology that the Ir David site at Silwan was promoting a selective history.

“The sanctity of the City of David is newly manufactured and is a crude amalgam of history, nationalism and quasi-religious pilgrimage,” he wrote. He asserted that “the past is used to disenfranchise and displace people in the present.”

Ir David rejects such accusations. In a written response to questions, it said: “The holy basin is a national and international heritage site containing a wealth of archaeological remains of Jerusalem over the last 4,000 years, including crucial remains from the Canaanite, Jewish, Christian and Muslim eras. Anyone who visits this area can see that it has not received appropriate funding, either from the Israeli government or from the municipality in recent years.”

It added that it had displayed and publicized non-Jewish finds, including gold coins and a city wall, both from the Byzantine period.

At the same time, the Web site of Al Quds University, one of the most important Palestinian institutions, states that the Western Wall, the remnant of the Jewish temple destroyed by the Romans in A.D. 70, was probably built by the Romans because the temple could not have stood there.

There is no scholarly dispute about whether the temple stood beneath what is today the Aksa Mosque compound.

Prof. Benjamin Kedar, chairman of the Israel Antiquities Authority, acknowledged in a letter to fellow archaeologists that Ir David was “an association with a pronounced ideological agenda” and “has presented the history of the City of David in a biased manner.”

He said the antiquities authority was seeking changes. But the work itself, he said, is unassailable and supervised by top professionals and scholars.