Jerusalem has played host to a two-day arts festival with a difference as part of Palestinian attempts to celebrate the city's year of being Capital of Arab Culture. The BBC Arabic Service correspondent in the city, Ahmad Budeiri, joined the audience.

A group of about 100 specially invited guests gathered at Jerusalem's Damascus Gate for the evening's programme to begin.

The area is heavily guarded by Israeli security forces, lying on a crucial junction between the city's Arab and Jewish areas. But though the police have already intervened to prevent several Capital of Arab Culture events this year, on this occasion they did not, or could not.

First we were divided up into several sub-groups and then led into the winding alleyways of the Old City.

My party arrived at an old stone house with a small courtyard, where three musicians were waiting to entertain us with a mixture of traditional Palestinian songs and some 20th Century classics from the popular Arab repertoire.

The al-Quds (Jerusalem) Underground Project was under way.

"We have tried to perform at public venues in Jerusalem, but the Israeli authorities always denied permission," said drummer Ahmad Hdeib.

But he added they would never stop trying to "send our voice to the world" from the Old City.

Vocalist Omar Abu Nejmeh admitted it was not an easy choice to become a Palestinian artist living in Jerusalem, but this unique occasion was one of its compensations.

"I feel we have gone back in time, singing in such an old house, rather than a modern theatre or concert hall," he said.

The reason for these precautions is that many events marking the Arab League and Unesco-backed City of Arab Culture year are sponsored by the Palestinian Authority, and anything involving the PA in Jerusalem is banned by the Israeli authorities. The east of the city has been occupied by Israel since 1967.

Most of the 2009 events have taken place outside the city, in nearby Ramallah or other Palestinian towns in the West Bank.

But there was little objection the Israeli authorities could raise to these performances, in six venues that were all private houses or businesses, arranged without PA involvement and mainly advertised by word of mouth.

But the Jerusalem Underground Festival is nevertheless a response to Israel's suppression of Capital of Arab Culture events, with venues kept secret from the police in case they disrupted the shows.

With some of Old Jerusalem's alleyways not having amenities like streetlights, sometimes the audiences was led around in near total darkness with only the screens of their mobile phones lighting the way.

The project was the idea of Dutch composer Merlijn Twaalfhoven who worked for several months to arrange it.

"The idea is to look beneath the surface of Jerusalem since the surface is politics, history and religion, but under that there are people and reality, and we seek the truth about their lives and their daily routine," he said.

After the first concert, our group was taken to another house to watch a short play about discord in family life.

The play had been scheduled to be staged at East Jerusalem's only theatre, but one of the actors told me after his performance that Israel's Internal Security Minister Yitzhak Aharonovitch was working to close the theatre down for carrying out "illegal activities".

Further stops took us to a traditional bakery and someone's house that had been turned into a lending library, a much-needed resource because Palestinians do not have a municipal library of their own in Jerusalem.

In the fragrant setting of the bakery, we heard poems by the Palestinian poet Mahmoud Darwish read by the artist/activist Majed Almani.

Almani told his audience - including a few customers who had come to buy bread and stayed to listen - how he had to come to this very bakery as a boy, and how he had helped the baker and played with his children.

The organisers insisted the "underground" organisation was no gimmick, but articulated the need to fight the suppression of Palestinian identity by the Israeli authorities in Jerusalem, where cultural activity has become part of the political conflict.

"Jerusalem Underground creates an intimate setting where personal confessions and little everyday things of life can be told," says Mr Twaalfhoven.

"Our message is not conflict and segregation, but contact and curiosity. Visitors make real contact with the place and the character of the performance.

"For them, each performance is a little piece of the puzzle that is Jerusalem; small but very intense and clear".

After the shows ended, the audience dispersed having successfully avoided any interference by the Israeli police.

The artists, meanwhile, pledged they would continue to perform in Jerusalem, even if it had to be in secret locations.