Israeli settlers are waging court battles to evict dozens of Palestinians from homes in an East Jerusalem neighborhood, a move threatening to widen Israel's rift with U.S. President Barack Obama over settlements.

They are trying to reclaim plots of land in the Sheikh Jarrah neighborhood which they say were owned by Jews before Israel's creation in 1948. They have already won property rights to six Arab homes, whose residents were subsequently evicted.

Palestinians and an Israeli rights group say settlers are trying to evict a further 27 Arab families from 28 buildings.

"Stop ethnic cleansing," reads a sign erected outside the home of Maher Hanun, a 51-year-old father of three, who faces a July 19 deadline to evacuate the structure in Sheikh Jarrah, near the walled Old City of Jerusalem.

Such acts could cloud Israel's relations with its main ally, the United States.

Obama, who is to address the Muslim world in a speech in Egypt Thursday, renewed a call for a halt to settlement activity during talks last week with Palestinian President Mahmoud Abbas.

Settlers have moved into six Arab buildings in Sheikh Jarrah, home to consulates and trendy restaurants. Armed men guard the buildings where settlers have hoisted Israeli flags to assert Jewish dominance.

Israeli Prime Minister Benjamin Netanyahu has vowed not to accept limits on building of Jewish enclaves within Jerusalem, including the Arab east. He has also rebuffed U.S. calls for a full settlement freeze in the Israeli-occupied West Bank.

Abbas has said Arab East Jerusalem will be the capital of a future Palestinian state he wants to establish alongside Israel in the West Bank and the Gaza Strip.

Israel captured East Jerusalem in the 1967 Middle East War and considers the whole city as its "united and eternal" capital, a claim that has not won international recognition.

"Why should we be evicted from homes in which we and our children were born, only to give way to more Jewish settlements?," asked Hanun, whose family has been living in the house since 1956.

OLD DEEDS

Settlers have unsuccessfully sought permission from Israel's Jerusalem municipality to raze 28 Palestinian homes in the area surrounding Hanun's house, to make way for 200 housing units and a public garden, the municipality's online archives show.

But they are winning legal battles in Israeli courts which recognize documents from the Ottoman and British mandate eras showing that Jews owned plots of land in East Jerusalem where Arabs built homes.

An Arab family was evicted in November and the Hanuns and their neighbors have until July 19 to comply with evacuation orders or face eviction and hefty fines.

"These developments strengthen Israeli control of this area and thwart the feasibility of future agreed-upon borders for Jerusalem," the Israeli Ir Amim, or City of Nations, rights group, founded in 2004 to advocate equality in Jerusalem, said in a report.

It said that Israeli courts do not accept similar Arab claims to land and property in Jewish West Jerusalem. The high-end neighborhood of Talbieh is abundant with old white-stone houses whose Palestinian owners fled or were forced to leave during the 1948 war over Israel's creation.

"They are not only stealing our homes, but our dreams, memories and hopes too," said Hanun.

Some 260,000 Arabs, most of them Muslim, live in East Jerusalem. They carry Israeli identity cards, giving them access to welfare and health services, and freedom of movement denied to Palestinians in the occupied West Bank. But few have taken up the possibility of full Israeli citizenship.

They say Israel's policies toward Arabs in the city as well as a barrier it is building in and around East Jerusalem are designed to drive them out.