In theory, a municipality demolishing illegal structures on its land should not raise any eyebrows. In practice, however, such a measure should be viewed in the context of the wider politics of the locality – and when it comes to the tinderbox of Israeli-Palestinian affairs, the Israeli authorities' actions should be seen for the provocative and spiteful behaviour that they are.

Ending a nine-month freeze on demolitions of Palestinian homes in East Jerusalem, municipal workers this week razed three houses in the area, provoking a storm of controversy both at home and abroad. The freeze came about as a result of diplomatic outrage last time Israel carried out demolitions in East Jerusalem during Hilary Clinton's visit to the region in March 2009 – actions described by Clinton as "unhelpful" and a violation of Israel's Road Map commitments.

Since then, Israel has continued to flout agreements for a moratorium on illegal construction in Israeli settlements, while continuing to pursue a hardline, heavy-handed approach towards Palestinian residents of East Jerusalem. Evictions of Palestinian families to make way for incoming settlers continue apace in Sheikh Jarrah; in Silwan, 22 homes are slated for demolition so that a landscaped public garden can be developed; and throughout the eastern half of the city nonstop pressure is applied as part of what activists term the policy of "quiet transfer".

According to Angela Godfrey-Goldstein of the Israeli Committee Against House Demolitions, the "quiet transfer" denotes the gradual wearing down of the Palestinians to the point that they throw their hands up in despair, quit the area and head east. Housing permits are also part of the quiet transfer, she says.

Much of East Jerusalem has been declared an "open green zone", preventing houses being constructed, which in turn leads to a severe housing shortage in the region. Fewer houses than people means that the cost of property soars, pricing the locals out of the market and forcing them to seek cheaper accommodation on the other side of the security wall. Once they leave, they rescind their rights to Jerusalem ID papers, destroying any hopes of employment in Israel proper – effectively keeping them caged in the poverty of the West Bank for ever.

Meanwhile, green lights are given to settler construction left, right and centre – a blatant case of double standards, Godfrey-Goldstein points out. In the rare event that Israeli courts condemn settlement buildings as illegal – such as Bet Yehonatan in Silwan – eviction orders are ignored by the settlers and unenforced by the authorities, proving the duplicity of the municipality when it comes to building violations by those on either side of the political divide.

On top of the awful implications for the families made homeless by the bulldozers this week, the demolitions are another blow to Israeli-Palestinian relations. The destruction of the homes in Issawiya and Bet Hanina are as clear a sign as any that Israeli leaders care little for concessions and compromise, preferring to make quick political capital on the domestic front by kowtowing to the ultra-nationalists in their midst.

Israeli politicians have been treading such a path for months, their resolve strengthened by the toothless international response to their flouting of both international law and basic moral codes.

Nir Barkat, Jerusalem's incumbent mayor, famously dismissed Hilary Clinton's criticism of home demolitions last year as "air", summing up the sneering and self-confident attitude of the majority of those at the helm of Israeli politics.

Unfortunately, it is not hard to see where their arrogance stems from: for years, no American or European leader has dared match their angry words with concrete actions, such as sanctions against Israel.

Despite all the hype surrounding Barack Obama's accession to the throne of American politics, it is still business as usual in the relationship between the US and its client state in the Middle East. Moves to deal sensibly and seriously with the issue of dividing Jerusalem have stalled in line with every other major bone of contention – such as the issues of illegal settlements, water rights in the West Bank and Palestinian refugees.

Against such a backdrop, Israel's resumption of demolition in East Jerusalem can be seen for what it is: a brash statement of intent on both the micro and macro political levels.

"Judaising" East Jerusalem is a stated policy of numerous settler groups and their financial and political backers, and every home demolition and family eviction expedites the process of ethnic cleansing already embarked upon.

If nothing is done to stop the rot, the inevitable outcome will be a total breakdown in talks between the two sides, likely sparking a wave of violent clashes in its wake.

The only way to prevent such a disastrous turn of events is for the US, EU and others to force Israel's hand – for it is Israel who holds all the cards when it comes to negotiations. Anything less will not do: time has all but run out to bring the two sides to the table, and the only winners from the current status quo are the extremists. Israelis and Palestinians alike don't deserve, nor can they afford, the consequences of another intifada, hence firm intervention is a necessity.

Home demolitions are only the tip of the iceberg, but they are as combustible an issue as any in terms of the political implications they engender. Israeli leaders have shown they couldn't care less about the damage they are doing in both physical and emotional terms; it is high time that they were made to care, for the sake of all parties concerned.