Supreme Court Rules: Israel Can Confiscate Palestinian Property in Jerusalem

The justices said the controversial Absentee Property Law is applicable in East Jerusalem, but warned it should be used only rarely, and with explicit approval of the attorney general.

Jabal Mukkaber
The East Jerusalem neighborhood of Jabal Mukkaber, seen from the new Jewish neighborhood of Nof Zion. Eyal Toueg

Only a day after the High Court of Justice upheld most of the sections of the “Anti-Boycott Law,” the justices of the Supreme Court approved the use of another controversial law: The application of the Absentee Property Law to assets in East Jerusalem. The practical effect of the ruling is that it allows the state to take control of property in East Jerusalem whose owners live in the West Bank or Gaza.

However, the expanded seven-justice panel, headed by former Supreme Court president Asher Grunis and present President Miriam Naor, did warn that the application of the law to East Jerusalem presents many problems and it must be used in only the “rarest of rare cases.” Grunis even went as far as to say that the “literal” use of the law for Palestinians who reside in the West Bank could bring about its application to Jewish settlers who own property within Israel proper, enabling the state to take over their property as well.

“For example, that is how, according to this interpretation, a property located in Tel Aviv whose owner is a resident of Ariel or Beit El could be awarded to the Custodian,” wrote Grunis in the court’s decision. In an even more extreme example, Grunis noted the absurdity of the wording of the law and said that it could be read in such a way that even a soldier sent by the government to serve in the territories or into an enemy country could have his property declared as “absentee property.”

Under the law enacted in 1950, any person who lived in a hostile country, or in the area of “the Land of Israel” that was not under the State of Israel’s control, and owned property within the state, is considered an absentee owner and his property may be transferred to the state’s Custodian of Absentee Property. The primary purpose of this law was to enable use of lands belonging to Arabs who left Israel during the War of Independence.

In 1967, after the Six-Day War, which saw the extension of Jerusalem’s municipal boundaries, Palestinians with assets in Jerusalem suddenly found themselves considered “absentee” owners, even though they hadn’t gone anywhere. Sometimes they were living only a few hundred meters away, but outside the new Jerusalem city limits and officially in the West Bank, and found their property confiscated only because Israel drew the new municipal border between them and their property, making them no longer residents of Jerusalem - though they never left their homes.

The law is worded in very broad terms, and states that any person who owns property in Israel and lives, or is present, in an enemy country can be declared an absentee and the property will be transferred to the control of the Custodian — and used for the “development of the country.”

The West Bank, even though it is under Israeli military control, is by law still territory of an “enemy nation.”

The present Supreme Court ruling came in response to a number of cases appealed to the highest court over the past few years filed by Palestinians who had their property taken under the law.

The decision concerning the application of the law in East Jerusalem has significant implications for Jewish settlement in the city’s predominantly Palestinian neighborhoods. Over the years, the Absentee Property Law has become a tool for right-wing groups seeking to increase the Jewish presence in East Jerusalem. These groups ask the custodian to expropriate houses whose residents are in the West Bank and then rent the premises from the custodian, usually for a nominal fee.

Grunis, with the rest of the justices concurring, ruled that the law does apply in East Jerusalem — and rejected the appeals of the Palestinian property owners.

Naor, while agreeing that the application of the law is legal, said she doubts a case can be found in which the law could be applied in practice, and in her opinion, in light of the ruling the state should consider returning some properties that were confiscated.

In the end the justices decided against overturning the law, but said any such future use would require the explicit approval of the attorney general. Grunis also said the law was problematic from the point of view of both international and administrative law, since the absentees in these cases are no refugees and they live in areas under Israeli control. They have become absentees, writes Grunis: “Not because of any act taken on their part, but because of the transfer of control in Jerusalem to Israeli hands and the application of Israeli law there. These are not [people] under the control of other countries, but [people] who are in territories in which Israel has control — to some extent — over.”

Avigdor Feldman, the lawyer representing one of the appelants in the case, said: “The justices demonstrated a very formalistic approach. They determined that it is not proper, but have passed the buck to the courts, attorney general and the Custodian. They have asked to trust the generosity of the state not to make use of [the law]. That is running away from responsibility. It is clear that the law was created during a different situation and for other purposes, and is not appropriate for the present circumstances.”

Adalah, the Legal Center for Arab Minority Rights in Israel, which joined the case as a “friend of the court,” said after the ruling: “Even though the court noted in its ruling that the law is arbitrary, and the ruling brings examples of that, it allows the continued application of one of the most racist and arbitrary laws in Israel, which was enacted in 1950 with the goal of confiscating the property of Palestinian refugees who were expelled from their homes."

Although in 1968, Meir Shamgar, then the attorney general and later a Supreme Court justice, ordered that the law not be applied to East Jerusalem, with the establishment of the Likud government in 1977, the law came back into force. The pendulum swung back again in 1992, under then-Prime Minister Yitzhak Rabin, but in 1997, restrictions on the law’s application were once again loosened, and in 2004, under then-Prime Minister Ariel Sharon, the cabinet decided, against the position advocated by the Justice Ministry, to restore all the custodian’s powers with regard to property in Jerusalem.

In 2005, then-Attorney General and now Supreme Court Justice Menachem Mazuz wrote a sharply worded letter as attorney general ordering that the law not be applied in Jerusalem. “The application of the powers of the Custodian of Absentee Property to properties in East Jerusalem raises many serious legal difficulties regarding the application of the law and the reasonableness of its decision, and … the obligations of the State of Israel toward the traditional principles of international law,” he said.  

In 2006, then-District Court Judge Boaz Okun also ordered the law not be applied in Jerusalem, but at the end of that year, the state appealed Okun’s ruling to the Supreme Court.

In 2013, Attorney General Yehuda Weinstein wrote in a legal opinion that the law could continue to be applied to Palestinian homes in East Jerusalem.