...you are absolutely correct. It is not fair, nor just, nor even legal. The "annexation" of East Jerusalem has always been illegal and considered null and void. Even the US resists putting the embassy there for this fact. East Jerusalem will be the capital of the nascent state of Palestine. It is inevitable and the only way forward for peace.
US rally shows support for ex-Marine held by Iran on spying charges (AP)
from the article: Israel stripped thousands of Jerusalem Arabs of residency in 2008