As she hands out paper and magic markers, Basima Alian quizzes her young campers in a sing-songy voice.

"How many times a day do we pray?" asks Ms. Alian, the head counselor.

"Five!" They respond in unison.

"Can a woman be muezzin?" she asks, referring to the individual who calls a Muslim community to prayer.

"No, only a man," one boy answers.

"How do we pray together in the mosque?"

"Men in the front, women behind them," a girl says.

Short lessons in Islam are part of the regular routine of this summer camp in Sur Baher, an Arab neighborhood of East Jerusalem that gained unwanted notoriety last year as the hometown of a Palestinian assailant.

The day has some time for exercise and play, but the main focus for the 4- to 9-year-olds is on building Muslim and Palestinian identity. They read passages from the Koran, sing religious anthems, and learn hadith – sayings of the prophet Muhammed.

Teaching Islamic values and Palestinian pride are certainly among the top priorities at the "Better Tomorrow" camp; indoctrination and extremism are not, say Alian and her boss, camp director Sufian Jadallah. But the camp is housed in an Islamist cultural center that Israeli police welded shut early last year, leaving behind a letter from the Interior Ministry. "This is a terrorist organization and is therefore being closed," Jadallah says, summarizing the terse letter he received, signed by the Israeli police. No other explanation was given and the center could not challenge the accusation, says Jadallah, who notes that the police are allowed to close down institutions deemed to be terrorist organizations.

"It is true that we are Islamist. Does that mean we are terrorists?" asks Mr. Jadallah, as kids get a bounce inside a lunar ride and listen to Islamic music. "Israel always uses the word 'terrorism' as a pretext for closing our institutions, but when we ask what they mean by that, they have no answers."

Since the Israeli closure order of the center, called the Culture Forum, wasn't renewed when it expired few months ago, Jadallah – who is also the head of the center – hired a welder to pry open the gates and doors of the center again. So far, the camp fun goes on, though the staff worries that they could be shut down at any time.

"Just the way they closed down the whole institution for no reason, they could come and close our camps," Jadallah says.

Jerusalem triples funding for alternative camps

That Israel sees such camps as a threat is not in his imagination. In recent years there has been alarm in the Israeli media over Palestinian summer camps run by Fatah and Hamas, some offering paramilitary training for teenagers. Now, even camps for younger children have come into question, and officials in the Jerusalem municipality say they're in a struggle to make municipal-run (read: Israeli) camps more affordable for the children of Arab East Jerusalemites.

"The Islamic movement is running summer camps with a very clear agenda: to indoctrinate young kids to a very strict religious viewpoint and what we know are very extreme messages, which of course we think is not the right thing," says Yakir Segev, a Jerusalem city council member who is in charge of the East Jerusalem portfolio.

"There's a competition for the hearts and souls of the kids," he says. "There are community centers which the municipality supports, which has summer camps which are more moderate."

To that end, the Jerusalem municipality tripled its budget this summer for city-funded day camps in East Jerusalem, Mr. Segev says, spending close to half a million shekels, or about $128,000.

"What we are trying to do is to provide parents with an alternative, by offering low-cost programs that will be a counter to the extremists," he says.

Up to 8,000 children are now in such programs, a huge boost from previous years when funding for activities in Arab neighborhoods of East Jerusalem – which Israel annexed following the 1967 Arab-Israeli war – was low on the public agenda.

'We want to tell children Palestine is our land'

Those areas have gained more media attention over the past year after a number of violent attacks in predominantly Jewish West Jerusalem perpetrated by young men from East Jerusalem neighborhoods, including Sur Baher. A year ago, a Palestinian from Sur Baher killed three people and wounded 30 others when he rammed a bulldozer into a bus and cars on a busy Jerusalem street, raising alarm bells over extremists making inroads here.

"Not all the religious groups have extreme ideologies, but they often come together," Segev says.

The attack put Sur Baher on the map and, residents complain, has resulted in Israeli police cars prowling the neighborhood more often. Israeli authorities demolished the assailant's family home: the punitive step the state usually has taken toward suicide bombers. The increased tensions have been traumatic for the children, says Alian, and camp is a place to express that.

"Sur Baher has had a lot of problems in the past year, and we want to help support the children in that," says Alian, taking a break as the kids bop to an Islamic pop song. "We want to tell the children that Palestine is our land. And other than that, our camp has a few main goals: to teach the children the virtues of cleanliness of body and soul, to expand their knowledge of Islam, and increase their devotion to God." She hesitates for a minute as a girl tries to show her drawing of Jerusalem's Dome of the Rock, the third-holiest site in Islam. "Oh, and it's also for them to have some fun."