Forty nine years ago (in 1967) Israel annexed the Palestinian neighborhoods and villages surrounding Jerusalem to the city’s municipal jurisdiction, despite the fact that they had not previously been part of the city. This hasty and coercive move was an error of historic proportions.
Today, some 320,000 Palestinians live in areas annexed to the city by Israel. They possess Israeli residency cards and are guaranteed rights under Israeli law, including the right to apply for Israeli citizenship. Many are dependent on Israel for employment, healthcare and welfare services. This dependency cannot be terminated in one fell swoop. It can only be reversed through an ongoing but vigorous effort to build alternative economic, social and municipal infrastructures within and without the Palestinian parts of the city. Only afterwards–as part of a future permanent status agreement with the Palestinians – will it be possible to separate Palestinian and Israeli neighborhoods, political and security conditions permitting.
The State of Israel will establish an administrative separation between the Palestinian villages and neighborhoods ('Palestinian Jerusalem') in 'East Jerusalem' and the city’s Israeli neighborhoods. This will not require changes to the Jerusalem Law or affect the status of Palestinian residents.
A 'municipal umbrella' will be established for the Palestinian neighborhoods and villages, to be managed as a separate municipal framework within the city of Jerusalem. This 'municipal umbrella' will be invested with authority in the fields of planning and zoning, construction, tax collection, infrastructure development, education, municipal services, promotion of trade, assistance to small businesses, community services, etc. It will manage its dedicated budget, separately from the budget of the City of Jerusalem.