Israel's moves to cement its hold on Jerusalem could drive Palestinians in the holy city to violence and damage prospects for a comprehensive peace deal, a leading think tank said on Tuesday.
In a new report, the International Crisis Group said the building of Israel's separation barrier and settlement expansion around the city could choke East Jerusalem and anger Palestinians there who have generally avoided armed conflict.
It said that could create a "powder keg" in the city that could dim prospects for peace even as the United States and other Western countries tout Israel's planned pullout from the Gaza Strip as a fresh chance to renew stalled negotiations.
"Current activity around Jerusalem to link up Jewish West Bank settlements to East Jerusalem will not only undermine chances for a viable two-state solution, but create an explosive mix that will imperil the very security Israel states it is trying to guarantee," said Robert Malley, the group's Middle East and North Africa program chief and author of the report.
The ICG report said settlement and barrier construction risked "planting the seeds of future confrontation".
Israel, which calls its barrier a security measure not meant as a permanent political boundary, dismissed the criticism.
Foreign Ministry spokesman Mark Regev said the barrier aimed to protect Jerusalem from attacks emanating from the West Bank and not to cause hardship to Jerusalem Palestinians.
"The fence is a substantive and very effective way of preventing suicide bombers from entering Israel," he said.
Some 55,000 Palestinian Jerusalem residents will be on the West Bank side of the barrier, although Israel says they will be allowed to cross. Almost 200,000 others will be on the other side and would need Israeli permits to go to areas of the West Bank controlled by the Palestinian Authority.
The ICG said Israel should protect its citizens. But it said Israeli moves may be counter-productive, reducing economic opportunities and leading to overcrowded living conditions in a fractured East Jerusalem that would not boost security.
"In fact, they will undermine it, weakening Palestinian pragmatists, incorporating hundreds of thousands of Palestinians on the Israeli side of the fence, and sowing the seeds of growing radicalism," the report said.
Palestinians want East Jerusalem as capital of a future state in the West Bank and Gaza Strip. But the barrier takes in East Jerusalem land that Israel captured in the 1967 Middle East war and annexed in a move not recognized internationally.
The ICG said settlement construction would "create a Jewish belt around Arab East Jerusalem" that would isolate it from the West Bank and constrict Palestinian growth in the city. That could make a two-state solution more difficult, it said.
Police have said Palestinians from Jerusalem have only rarely mounted attacks targeting Israelis during a Palestinian uprising that began in 2000.
But Israeli authorities fear armed groups could try to exploit the relative freedom of movement enjoyed by Jerusalem Palestinians compared to compatriots from Gaza or the West Bank.
Mouin Rabbani, a senior ICG analyst, said it could become easier for militant groups to recruit Palestinians from Jerusalem to carry out attacks as resentment and hardship rose.
