Canaanites, Phoenicians and Egyptians where living in present day Israel over 3000yrs ago. The Jewish people have a old history in this area but so do others. 100yrs ago there was only 30,000 Jews in this area most came after the wars. Both sides have fair claims and a divided city is bad. So there are no good or fair solutions, the city should be part of Israel but Muslims and Christians should be allow to live or move there and not be treated as 2nd class.
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Firebombs hurled at Border Policemen in East Jerusalem's Ras al Amud; no policemen wounded (Haaretz)
from the article: EU envoys: Israel trying to sever East Jerusalem from West Bank