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The Cliff Hotel, a four-floor building 50 meters from the Palestinian parliament in Abu Dis, has launched one of the stormiest controversies over Israel's separation fence. About 100 meters of the fence are planned for the hotel area and the hotel's original owners, from the Ayad family, have been waging a legal battle to stop construction of the stretch of the fence.

The hotel, located within a few dozen meters of the parliament building that the Palestinian Authority built in 1996, stands idle today, and the custodian of lost property has declared the facility to be state property.

The legal battle is supposed to determine where precisely the stretch of the separation fence is to be built.

The fate of the parliamentary building has already been settled - it has been detached from Jerusalem, and will remain outside the city's limits. The Cliff Hotel, however, is another story. Though the hotel was considered part of the West Bank for 37 years, it is slated to be incorporated within Jerusalem. One of the questions to be decided by the courts is whether the hotel will be restored to its original owners, the Ayad family, or whether it will be turned into a base for Israel's Border Police following the completion of the separation fence.

Last Friday, some Border Policemen entered the hotel. They set up some observation positions on its rooftop, and have also taken over the hotel's renovated lobby. The Border Policemen's entry to the Cliff Hotel was authorized by the Jerusalem District Court - the court ruled that Israel's security forces can utilize the facility until its fate is settled.

Quartered in residences near the hotel, its owners, members of the Ayad family, can only watch as the Border Policemen roam about their property.

The Cliff Hotel was built in 1954 on a 3.5 dunam plot of land by Abdel Hadi Ayad, the father of the present owners. Originally, it served as a private residence. Ten years later Abdel Ayad expanded the building, which provides views of the Temple Mount and the Dead Sea and the facility served as a kind of lodge for diplomats and tourists. Thereafter, the 36-room facility served in periods as a formal hotel.

After the area was conquered by Israel Defense Forces troops in 1967, the facility was turned into a residence for Jewish mental health patients - these patients were transferred to the relatively far-off Cliff Hotel by relatives in West Jerusalem. Israel civil administration authorities decided the facility was to be treated as though it were on the West Bank; Israel's civil administration took control of the facility, and the hotel even appeared in administration promotions, on a list of "tourist attractions in the Judea and Samaria regions."

In 1996, IDF commanders took control of the facility for a short period, and used it as a base for troops, but the hotel was restored to its owners' control as the result of a High Court petition. Ayad family members started to renovate the hotel, believing (in 1997) that a period of peace conducive to tourism was about to begin. Three years later the intifada erupted; since then, the hotel has been rented to nearby Al-Quds University for use as a student and faculty residence.

Planning for the separation fence in the area began as early as 2002, and the Ayad family received reports that the fence route would run very close to the hotel. Last August, the Ayad family received an order signed by Defense Ministry Director-General Amos Yaron - the document declared the hotel stands on land that belongs to the Jerusalem municipality, and that the custodian for lost property has classified the hotel as a state asset.

A dozen heirs of Abdel Hadi Ayad, who died in 1978, (including a British citizen, a Norwegian citizen, four Jordanian citizens, three PA citizens, and three citizens of Kuwait) were informed that their asset had been seized by the State of Israel.

The 1949 Lost Property Law stipulates that a person who holds assets on the land of Israel, and who fled to an enemy state (a definition which encompasses all Arab states), forfeits his or her property, which devolves upon the custodian.

For over 35 years, Ayad family members were considered to be residents of the West Bank, which was occupied by Israel, and they had no links with Jerusalem. The separation fence project changed the family members' status; suddenly the state became interested in seizing their hotel, and turning it into a Border Police base.

The family appealed to Jerusalem District Court last week, asking it to overturn the custodian's expropriation order. Some of the family members claim the 1949 law cannot apply to them, since they are not residents of an enemy country, and because they have always been considered West Bank residents whose affairs were handled by the civil administration, meaning they cannot be considered Israeli citizens who fled to hostile countries.