Tel Aviv, Israel

Diplomatic tensions have flared over Jerusalem for the first time in weeks following the preliminary approval for a controversial plan for a tourist park in the East Jerusalem neighborhood of Silwan. The plan calls for 22 Palestinian houses to be demolished.

The decision Monday by a Jerusalem municipal planning committee immediately drew condemnation by the Palestinian Authority and a warning from the United States.

Three months after the announcement of an East Jerusalem building project upended Vice President Joe Biden's visit to the region, the move highlights the potential threat to peace talks and regional stability posed by Israeli development in contested areas of the Holy City.

"It's like lighting a match in a roomful of gas,'' says Meir Javedanfar, a Middle East analyst based in Tel Aviv.

Once again, a lower-level government agency has taken a small step toward a project that will take years to complete, leaving Prime Minister Benjamin Netanyahu, the US, and the Palestinians to handle the fallout.

The decision comes just as Israel tries to tamp down the diplomatic uproar from the fatal intercept of a Gaza-bound aid flotilla, and two weeks before Netanyahu is scheduled to visit the White House.
'I don't think Netanyahu approved this'

To build a park and commercial center southeast of the Old City, Jerusalem Mayor Nir Barkat wants to demolish 22 Silwan homes, which the municipality says are illegally built, and provide alternative housing for Palestinians. The prime minister's office has pushed for a compromise with the affected residents, who oppose the plan.

Palestinian negotiator Saeb Erekat accused Israel of wrecking peace negotiations and called on the international community to stop the "dangerous'' Israeli steps, while US State Department spokesman Philip Crowley warned against unilateral decision that would prejudice peace talks on the final status of Jerusalem. Israeli Defense Minister Ehud Barak and Prime Minister Netanyahu sought to distance themselves from the Jerusalem municipal decision.

"The purpose was not for planning, it was political,'' says council member Pepe Alalo, who lost his title as deputy mayor for opposing the decision. "I don't think that Netanyahu gave this approval. [Mayor] Barkat is trying to outflank Netanyahu on the right.''

Indeed, there are signs of a de facto building moratorium in East Jerusalem, an indication of an understanding between Israel and the US since Vice President Biden's ill-fated visit, according to Alalo and Javedanfar.

"There's an unwritten agreement that some frustrated Israeli officials will make bombastic remarks, America will condemn them, but in reality nothing will happen on the ground in East Jerusalem and West Bank,'' says Javedanfar.

A Western diplomat said that although the move stirred concern because Jerusalem is always a sensitive issue, there is a recognition abroad that Netanyahu and Barkat are not on the same page on this issue.

A spokesman for the mayor, Stephan Miller, argues that the plan will "protect'' the residents from becoming homeless by legalizing 66 of 88 illegally built Palestinian homes.

Danny Seidman, an activist for Palestinian rights in East Jerusalem, argued that even though the decision itself will have little impact on the ground, it demonstrates "benign neglect'' on the part of the Israeli government that will ultimately undermine the fledgling peace negotiations.