Very few come to Jerusalem without deep-seated beliefs about its significance. For Muslims, Jews and Christians, Jerusalem's narrative is part of their own, relevant to their past, their faith and their future.

Members of these three faiths have managed to share Jerusalem and maintain a respect for each other's beliefs for centuries at a time. Israel's insistence on control of Jerusalem as its undivided capital breaks with this tradition and makes a resolution to six decades of hostilities with the Palestinians a near impossibility.

Israeli settlers encroach further into Arab neighbourhoods in East Jerusalem each year. There will be no freeze of this activity, Eli Yishai, the leader of the Shas Party, has said, because Jerusalem was "given to us by our creator". While Shas is the most radical element in the Israeli prime minister's coalition, Benjamin Netanyahu has argued unconvincingly that their demands make settlements politically impossible to stop. With each new bulldozer in East Jerusalem, Israel's claims of exclusive control over the holy city come closer to being realised.

On Sunday the Israelis made space for another enclave in East Jerusalem when the Shepherd Hotel was demolished. In the same neighbourhood last year, Arab homes were destroyed and families left on the street. The Israeli government has also established offices beyond "the green line" that has traditionally divided Arab Jerusalem from other parts of the city.

Many European diplomats are beginning to push back, refusing to meet Israeli officials in East Jerusalem. A document delivered to Brussels by 25 consuls general in Jerusalem does not offer any new condemnation of Israel's behaviour, but the punitive measures it proposes are unprecedented. Boycotts of Israeli businesses and tourist sites operating in the Arab quarter of the city are among their proposals. The diplomats also advocate EU intervention in East Jerusalem on behalf of Palestinians who "are arrested or intimidated" by Israelis.

These recommendations are not likely to lead to immediate changes in the EU's stance towards Israel. They do indicate, however, that what Israel is doing in East Jerusalem is receiving more attention. What the diplomats hope will be preserved in Jerusalem is its "multicultural dimension", which includes the Jewish, Christian and Islamic traditions. But if European countries don't take a tougher line with Israel over its behaviour, there may be little left of Jerusalem's multicultural character.

But without the support of the US, what the EU does will be of limited effect. While the US secretary of state, Hillary Clinton, said this week that new settlements in East Jerusalem "contradict the logic of a reasonable and necessary agreement", her statements lacked a logic of their own. If settlements, as she has said, are "illegitimate", why has the US done so little to stop them?