Sixty-three-year-old Ahmed Bargouth sits in the shade of a walnut tree and contemplates the view before him.

Across the valley is Jerusalem's zoo, which his grandchildren have never been able to visit, although they have watched animals through binoculars.

Below is the Jerusalem-Tel Aviv railway, also never travelled by the Bargouth family. Its route here marks the Green line, drawn after Israeli and Arab armies agreed an armistice in 1949, when Bargouth was aged two, which placed most of the original village of Al Walaja out of the reach of its Palestinian owners. A cluster of Israeli houses stand on land owned, inhabited and farmed by the Bargouth family and other villagers.

Behind Bargouth is the Jewish settlement of Har Gilo, built – illegally under international law – on occupied Palestinian territory and fast encroaching on what remains of the diminished village.

And in front of Bargouth's garden, planted with figs, plums, grapes and pomegranates, is an ugly scar of raw flattened earth where Israel is erecting a section of its separation barrier that will encircle the village and cut off farmers from fields, students from places of learning and patients from hospitals.

The original route of the barrier – which Israel says is necessary for security reasons – would have cut Al Walaja in two. The community launched a legal petition to keep the village intact, which was granted – with the catch that the revised route, announced in April 2006, would completely encage the village. Al Walaja would become a tiny Palestinian enclave connected to the nearest West Bank town by one road or tunnel controlled by a checkpoint.

This spring the bulldozers arrived. To Bargouth's dismay and anger, the barrier – which he expects to be a concrete base topped by a fence – will run through his land a few metres from his house. To create the required 100 metre-wide strip of restricted ground for the barrier's route, the Israeli military uprooted 88 of Bargouth's olive trees.

"Some were 180 years old, some were new trees," he said. The military offered to replant the trees, but Bargouth refused to be complicit in the action. "They had no right to uproot my trees. Why should I tell them where to replant them?"

More than 80% of Bargouth's land will be on the other side of the barrier. Going by the experience of other West Bank farmers cut off from their land by the barrier, he expects at best extremely limited access. The future, he says, is bleak.

"There will be no other source of income. We are decent people, we work hard. My children and grandchildren will look at the wall in front of us and know they have stolen our land."

But it is not only future generations that Bargouth is concerned about. Just below his terraces of fruit trees lies the family cemetery where his parents and his grandmother are buried. It is directly in the path of the barrier. "I went to court to get an order, preventing them touching the tombs," he said. A hearing later this month will decide on which side of the barrier the graves will end up. "Not only are the living suffering, but also the dead. Why should I need a permit to visit the graves of my parents?"

According to the UNRWA, the United Nations body that deals with Palestinian refugees, around 70% of Al Walaja's land was lost in the 1948 war. Then, following the six-day war in 1967, nearly half the remaining land was annexed by Israel and placed under the expanded Jerusalem borders. In the 1970s more land was confiscated for Jewish settlements. Now even more land is being taken to construct the barrier.

Half the village is now part of Jerusalem; the other half part of the West Bank. But because almost no villagers hold Jerusalem residency permits, they have no legal basis to live in – or even cross into – the "Jerusalem" side of the village. Dozens of people have been arrested over the years.

It also means they cannot get permission to build. Forty-five unauthorised homes were demolished between 1985 and 2005, and another 45 have pending demolition orders. Earlier this year, after a lull in orders, two more families received notice that their homes were scheduled for demolition.

The main source of income for Al Walaja's 2,040 inhabitants – nearly all registered refugees from 1948 – is agriculture. UNRWA is deeply concerned that farmers will be prevented from planting and harvesting crops and grazing sheep and goats on land on other side of the encircling barrier.

There are no health facilities in the village, and older children go to school in nearby Beit Jala or Bethlehem. No one knows whether continuous access in or out of the village will be allowed once the barrier is complete.

Al Walaja has been the focus in recent months of protests against the barrier involving villagers and Israeli and international activists. Bargouth hopes there will be more, despite the stiff military presence containing demonstrators. But, he believes, non-violent protest may not be enough to save his and others' land.

"The occupation must be resisted by all methods, from demonstrations to the gun," he says.

Symbol of peace

Alongside its bleak past, Al Walaja has another historical claim – one that, thankfully, has so far escaped the political traumas of the past seven decades.

Down a steep stony track and behind a padlocked gate stands what is thought to be the world's oldest olive tree. Dated variously at 5,000 and 7,000 years old, the tree's magnificent knotted and interweaving trunks and abundant leaves are tended daily by Salah Abu Ali, 38, whose family owns the land.

When a natural spring which irrigated the tree dried up a few years ago, it stopped producing its annual harvest of half a ton of olives, says Abu Ali.

But for two years he has watered the tree by hand and has been rewarded by the appearance of new branches. "It has a promising future," he says.

The olive branch is an international symbol of peace.