The Jerusalem municipality may offer to voluntarily relocate some 1,500 Palestinian residents of the city's Silwan neighborhood - currently living on top of an archaeological site - to alternative lots in East Jerusalem, residents say.

The option was brought up by city council and East Jerusalem portfolio holder Yakir Segev, in meetings with the residents.

The 88 houses at issue were constructed without permits in the Al-Bustan area of Silwan and are slated for demolition. They stand in an area known as the King's Garden, defined as being of great archaeological importance by the Israel Antiquities Authority.

According to attorney Ziad Qa'awar, the last meeting took place early February and saw Segev proposing two alternative locations, one on a different hill in Silwan, and the other in the neighborhood of Beit Hanina, in the northeast of the city.

The proposition was unanimously rejected by the residents.

"We told him that these were lands we inherited from our parents, and we were not going to give them up," said Fathi Abu Diab, a member of the residents' committee. "We were born here, and our children were born here too."

Abu Diab added the families would be happy to cooperate with any development of the area that does not harm the houses.

"But forcing us to evict will never work," he said.

Thursday, Segev denied that any compensation plan was in place.

"These houses have been issued with demolition orders, to which we have to comply," he said. "This was just an idea that came up in the talks."

However, participants in the meeting said most of it focused on the voluntary evacuation issue.

The demolition orders have been in place for several years, but have yet to be carried out, with international pressures running high. An alternative plan proposed by the residents was rejected by the city's planning committee.

Left-wing activists said Thursday the demolition orders were fueled by settler activists seeking to take over the land, in particular by the Elad association, which operates the adjacent "City of David" archaeological park. Elad denied any relationship to the plan.