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Were Ehud Olmert running in the upcoming election, his spokesmen would most likely hasten to deny the revelation of the Ir Amim organization, according to which the outgoing prime minister proposed to Palestinian President Mahmoud Abbas that Jerusalem be divided along lines that strongly resemble the Clinton outline of December 2000.

Ir Amim's annual report, released on Monday, states that, according to a number of reliable sources, the text of the proposal that Olmert presented to Abbas and the leaders of a small number of Arab states, reads, "The Jewish neighborhoods will be under Israeli sovereignty and the Arab neighborhoods under Palestinian sovereignty. The historic basin [of the Old City] will be administered under a special regime that will include representatives of the relevant sides. Free access to the holy places will be maintained."

The report's author, attorney Daniel Seidemann, notes that despite Olmert's shaky status, one should not minimize the document's importance. "We are talking about a decisive change of direction on the part of someone who until recently led the struggle against a compromise in Jerusalem, an incumbent prime minister who is expressing positions that until recently were regarded as treachery,"he said. The Prime Minister's Bureau made do with the response that "we do not relate publicly to any detail of the negotiations with the Palestinian Authority."

Other parts of the Ir Amim document reveal a disconnect between Olmert's statements and the deeds of his government in Jerusalem. In the historic Old City basin - that special site for which Olmert has secretly designated a multi-sided regime - ostentatious one-sided moves are taking place at this very time. In December 2007, the Jerusalem municipality approved a plan for establishment of an archaeological park in Silwan (Ir David), at the southern foot of the Temple Mount. This Disneyland-like plan includes a cable car ascending from close to the Dung Gate that is to connect to the Mount of Olives or Abu Tor, or both, as well as an escalator. It fits together neatly with an initiative on the part of right-wing organizations to build a synagogue, 10 housing units and underground parking in Silwan. At the same time, the trend is continuing to curtail the freedom of the residents of the Bustan neighborhood of Silwan, an area that has targeted by right-wing groups, which are putting pressure on the authorities to destroy 88 Palestinian-owned buildings there.

If there is any doubt yet about current policy in the historic basin, the authors of the Ir Amim report recall the case of the settlers' residence known as Beit Yehonatan. A peremptory court ruling from July 2008 ordered the evacuation and sealing of this building, which stands unharmed at a distance of some 200 meters from other buildings in the Bustan that have already been destroyed. The enforcement of the court order has been postponed repeatedly, in response to pressure on the law-enforcement authorities from politicians with close ties to the settlers. Beit Yehonatan enjoy regularly guard service from Border Policemen as well as private guards, whose tab is also picked up by the state.

"Even if Olmert did not deliberately undermine the diplomatic initiative that he committed himself to," Seidemann says, "he holds direct responsibility for the continuation of the traditional pattern of using building in East Jerusalem to thwart diplomatic moves." The hunger for planning and building evidenced in the months following the November 2007 Annapolis peace conference was overt, and it received the backing of the ministers in his government.

The opening shot for the large-scale and accelerated Israeli planning and construction in East Jerusalem was fired one week after the conference. In 2008, plans for the construction of 5,431 new housing units in the eastern part of the city were opened to public review, while tenders were published for the building of 1,931 units - an increase of hundreds of percentage points over the construction of previous years. Last year, planners at the Housing and Construction Ministry were working on three new plans for East Jerusalem, in Atarot, Hirbet Mazmuriyeh, and Walajeh.

The building of these Jewish neighborhoods will create a wedge between East Jerusalem and Bethlehem, and will harm the possibility of an eventual diplomatic arrangement that would provide for East Jerusalem becoming the capital of a Palestinian state. According to the Ir Amim report, last year, at a time when the leaders of the sides were talking about peace, the number of violent acts in the city actually increased. Terrorist attacks by a handful of Arab residents of East Jerusalem were followed by reprisal incursions on the part of right-wing activists into their neighborhoods. The security forces were seen to be refraining from taking action while the thugs assaulted residents and vandalized property.

There will be Israelis who are heartened to learn from the report that the tension, the separation fence, the dystrophy of services and the collapse of the educational system are encouraging the economic and cultural elites of East Jerusalem to move to Ramallah, in the West Bank. The Palestinians who remain in poverty-stricken Jerusalem are the weak ones who have nowhere to go. Apparently, what really counts is that, in the election ads, Jerusalem remains "the united, eternal capital of Israel."