Jerusalem Mayor Uri Lupolianski warned Sunday that the city of Jerusalem will not have a Jewish majority in less than a decade.

Lupolianski was speaking at a special cabinet meeting at the Menachem Begin Heritage Center in Jerusalem, to mark the 40th anniversary of the reunification of the city.

The mayor maintained that the primary problem in the city was a demographic one even though "there those who say claims that Jerusalem will be ours forever."

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We won't be satisfied with crumbs. We need a comprehensive plan," he added.

Prime Minister Ehud Olmert promised to allocate NIS 5.75 billion to the capital city over the next five years, and announced he would also cancel employer tax for Jerusalem.

Olmert pledged to transfer more government facilities to the city, to build a study center to focus on the city's history, using an endowment from the Yad Ben-Zvi non-profit organization, and to construct a complex of courthouses in the center of the city.

He said that the measures would "advance and encourage Jerusalem."

"We want to assure the economic strength of the city," said the director-general of the Prime Minister's Office, Ra'anan Dinur. "These measures will greatly assist in achieving this goal."

Hadash Chairman MK Mohammad Barakeh slammed the decision to hold the meeting at the Begin Center, which overlooks the Old City.

The Israeli Arab lawmaker said that "holding the government meeting across from the walls of the Old City, celebrating the occupation of the city, is a provocation."

He said that there would be "no peace without two capital cities in Jerusalem," and expressed the hope that "next year, the Palestinian government will convene in East Jerusalem."

The ambassadors from the European Union states have turned down invitations to attend Wednesday's Jerusalem Day celebrations, due to the disputed status of East Jerusalem, Army Radio reported Sunday.