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The number of East Jerusalem residents seeking Israeli citizenship has risen sharply in recent months, an Israeli official said Wednesday, as talk of a possible re-division of the city gains momentum.

The Interior Ministry has received hundreds of applications for citizenship from Arab residents of East Jerusalem over the past few months, instead of the average of several dozen, said ministry spokeswoman Sabine Hadad.

Hadad was unable to provide specific figures but said there has been an increase of hundreds.

The trend appears to stem from Palestinian fears that they could lose Israeli social benefits, such as health care or welfare payments, if their neighborhoods are shifted to Palestinian control in the future.

When Israel captured East Jerusalem from Jordan in 1967, the city's Arabs were given the opportunity to become citizens, yet they rejected it because they refused to acknowledge Israeli control over the city.

Instead, they were given the status of permanent residents, holding Israeli ID cards and making them eligible for many benefits enjoyed by Israelis. In contrast to West Bank Palestinians, permanent residents also enjoy freedom of movement in Israel.

The rise in citizenship applications comes as Israeli and Palestinian officials prepare for a U.S.-sponsored peace conference at the end of this month in Annapolis, Maryland.

The sides have begun discussing core issues that have scuttled the peace process for years, including the future of East Jerusalem, which the Palestinians seek as the capital of a future state.

Israeli leaders have indicated a willingness to cede some peripheral Arab neighborhoods to the Palestinians in a peace deal. This has raised the possibility that Arab residents could lose their residency status.

"There are no precise statistics available on how many East Jerusalem residents request Israeli citizenship," said Amos Gil, director of Ir Amim, a group working for Jewish-Arab coexistence in Jerusalem.

But many have been increasingly cut off from the West Bank by Israel's separation barrier, which runs through the city, he said, and have been forced to come to terms with living under Israeli control. Many also fear being cut off from their jobs, health care and schools if the city is divided, he said.

"People say, if what promises us a better life economically is being more Israeli," then I have no choice, Gil said.

Israel captured East Jerusalem from Jordan in the 1967 Mideast war and annexed it, a move never recognized by the international community. Today, around a third of Jerusalem's 750,000 residents are Palestinian.