Israeli security forces evicted two Palestinian families from their homes in East Jerusalem early Sunday after the families lost a long legal battle to remain in the contested properties, furthering a plan for Jewish settlement in the predominantly Arab area.

The move, days after senior American officials visited Jerusalem to press for a settlement freeze, prompted sharp international criticism.

Later Sunday, the Israeli police said they had evidence to support indicting Israel’s foreign minister, Avigdor Lieberman, on charges including taking bribes, laundering money and committing fraud.

Mr. Lieberman, who denied wrongdoing, has been the subject of various police investigations for 13 years. The police said they had passed their conclusions to the attorney general, who will decide whether to press charges. If Mr. Lieberman is indicted, he will be forced to resign.

Mr. Lieberman has become increasingly powerful in recent years as the leader of the nationalist Yisrael Beiteinu Party, an important partner in the governing coalition. He has gained some notoriety at home and abroad, particularly for the contentious positions he has taken on Israel’s Arab citizens.

Responding to the police announcement, Mr. Lieberman said he was the victim of police persecution. “As much as my political strength and the strength of Yisrael Beiteinu rise,” he said in a statement, so the police campaign “intensifies.”

In East Jerusalem, the evictions stemmed from a drawn-out legal dispute over the ownership of a site in the wealthy Sheikh Jarrah neighborhood, near the Old City. But the location of the neighborhood and competing Israeli and Palestinian claims to East Jerusalem make nearly every move on the ground politically charged.

As soon as the Palestinians had been forcibly removed from the houses, Jewish nationalists moved in, witnesses said.

Israel took the eastern part of Jerusalem from Jordan in the 1967 war, but the Palestinians demand that East Jerusalem be the capital of a future state for them. Continued Jewish settlement, especially in the heart of Arab neighborhoods, is seen by the Palestinians and many countries and international groups as anticipating a result of negotiations over the status of the city and strengthening Israel’s hold on it.

The police cordoned off the road leading to the disputed houses, stopping journalists from reaching them. Orthodox Jews were allowed through to visit a nearby site believed by Jews to be the ancient tomb of Shimon Hatzadik, or Simeon the Just, a Jewish high priest.

Nasser Ghawi, one of the evicted Palestinians, said his family had been living in its house for 53 years. Maher Hanoun, the head of the other evicted family, was out on the street like Mr. Ghawi.

“I do not need a tent or rice,” Mr. Hanoun said. “What I need is to return to my house, where I and my children were born.”

Thirty-eight members of the Ghawi family were removed from six apartments that made up one of the houses. There are 17 people in the Hanoun family.

The houses were built in the 1950s by a United Nations agency for Palestinian refugees when the area was under Jordanian control. Jordan gave the families ownership of the houses but had not formally registered the buildings in their names by the time the 1967 war broke out, according to the families’ lawyer, Hosni Abu Hussein.

In the early 1970s, a Jewish association claimed ownership of the land around the tomb, based on property deeds from Ottoman times. At first the Palestinian families agreed to pay rent to the association to continue living there as protected tenants. Mr. Abu Hussein said they stopped paying when he learned that the Jewish deeds had been forged.

Eviction orders were issued, though the authenticity of the property deeds is still debated in Israeli courts.

Robert H. Serry, the United Nations special Middle East coordinator, who visited the Hanoun home in the spring, said in a statement that he deplored the evictions, which he described as “totally unacceptable actions by Israel.”

The British Consulate, in Sheikh Jarrah, said in a statement that its officials were “appalled” by the evictions.

In a visit in March, Secretary of State Hillary Rodham Clinton warned against threatened evictions and demolitions in East Jerusalem.

Countering criticism of another Jewish building project planned for Sheikh Jarrah, Israel’s prime minister, Benjamin Netanyahu, said recently that Jerusalem residents had the right to live anywhere in the city and that Israel’s sovereignty over the capital “cannot be challenged.”

Separately, in Tel Aviv, the police continued hunting for a gunman who fled a gay community center after killing 2 Israelis and wounding at least 10 others on Saturday night. The shock over the attack jolted a society that largely values tolerance and has hardly been exposed to the specter of hate crimes. Both Mr. Netanyahu and the defense minister, Ehud Barak, strongly condemned the attack.