The battle for the heart and soul of Jerusalem is being waged on the gentle hilltop of the Mount of Olives. There, high above the mostly Arab neighbourhood, flies one of the largest Israeli flags you'll ever see. Its metal flagpole is anchored in a pair of four-storey homes, joined together by brick passageways.
The tandem of houses, now known as Beit Hoshen, once housed to two large Arab families who reportedly sold them to a man from a nearby community. He, in turn, sold them to a Jewish organization called Elad. Seven religious Israeli families now live in the building, much to the consternation of their Arab neighbours.
The hoshen was the breastplate worn by the High Priest in the days of the Jewish Temple. It's an appropriate name, since the magnificent view from the top floors of the house is of the Temple Mount - and Dome of the Rock - where the Temple is believed to have stood.
Beit Hoshen stands amidst a cluster of Arab homes, just above the Garden of Gethsemane where Jesus is said to have spent his last night before being tried and crucified.
The Elad house is more concerned with the perils of these times: Its windows are covered with heavy metal screening, every centimetre of its perimeter is viewed from one of several video cameras, and two well-armed security guards have little patience with a snooping journalist.
"They want our home, now," said a Palestinian neighbour, fearful of giving his name. "We refuse."
Other properties in the Arab area, however, are now Jewish-owned. The Seven Arches Hotel, a popular spot where tourists pose on camels with the golden Dome of the Rock in the background, changed hands in the past few weeks and permits were issued last month for the construction of 24 homes adjacent to a nearby Jewish yeshiva.
Palestinian leaders say they want all such construction in east Jerusalem stopped before they will resume negotiations on peace with Israel. The government of Benjamin Netanyahu refuses, insisting that any future Palestinian state will not include any part of Jerusalem.
The pattern of Israeli development appears designed to insure exactly that.
Israeli activists last year revealed a secret plan of a network of new national parks in the capital area, which, along with strategically located Israeli developments, will effectively cut Arab east Jerusalem off from the rest of the occupied West Bank.
"The idea is to create facts on the ground that will prevent the partitioning of the city [into Jewish and Arab sectors]" said Orly Noy, spokeswoman for Ir Amim, an Israeli organization that seeks peaceful co-existence in the capital.
"When you connect the dots you see there's a ring around the Arab neighbourhoods," Ms. Noy said. Even more than the security barrier that rings Jerusalem "this precludes any connection to the rest of the West Bank."
Elisha Peleg, a Likud member of Jerusalem's city council, says this is a good thing. "This plan strengthens Israel's sovereignty in Jerusalem," he said, referring to the recent permits for the 24 Jewish homes. It's a statement "that Jerusalem will remain united and will not be part of any negotiations."
For years, following Israel's 1967 capture of the Old City and eastern Jerusalem, a low-key group known as Ateret Cohanim had clandestinely moved into houses in the Muslim and Christian quarters of the Old City.
Today, Elad (the name is an acronym for To the City of David) is the biggest player, and a much more sophisticated one.
In the 1990s, the group started acquiring properties in Silwan, an Arab community below the Mount of Olives, near the Old City and Western Wall. This is the area where, it is believed, King David created his capital 3,000 years ago, and now, thanks to Elad, it is the site of an extensive archeological dig seeking to prove ancient Israeli roots, and it is home to several dozen religious Zionist families.
Elad purchased its first homes from reportedly unsuspecting Arab owners; acquired others by demonstrating Jewish title from before the state's creation in 1948, and took custody of several more when the government deemed that absent owners had forfeited title.
While Elad has property in other parts of east Jerusalem, the City of David, as the site is known, is the group's crown jewel.
Beginning at the Pool of Siloam, where the Bible says Jesus used the water to cure a blind man, Elad, with the support of Israeli authorities, has tunnelled underground up the hill to the centre of the City of David. The excavation has turned up Byzantine and Roman era roads but Arab residents complain the tunnel passes right under their homes.
"It's like an earthquake every day, they're digging," said Mohammed Siam, who lives on the main drag.
The road, frequented by heavy trucks, bears evidence of the tunnelling underneath. The gaping holes in one section have been covered by large metal plates; another section, replaced by new asphalt, is sagging badly again.
The Israeli court, however, ruled that neighbourhoods must yield to the uncovering of important history - though not so that homes are placed in jeopardy.
"No one wants to damage anyone's home," insisted Matti Cohen, a religion teacher who brings classes to the site almost every day. "We think it's possible to live together peacefully."
Of course, Elad gets to be a full partner of the government in the operation of the site, just as the rightwing settler group has been designated to run all the other national parks in the capital that have been announced.
One such park is to be created next to the Palestinian community of Isawiya at the eastern edge of Jerusalem.
Darwish Darwish, head of Isawiya's municipal council, says his community of 20,000 was preparing to apply for a permit to expand on land the community owns. That was when they learned the Israeli government had other plans - to expropriate a total of 90 hectares on which to put a park. It would include land already confiscated and planted with trees by the Canadian branch of the Jewish National Fund.
"Resistance is hard," said a resigned Mr. Darwish. "We can't fight them."
He said the government has offered a compromise: The community would be given approval to expand on some of the land, in exchange for contributing the rest of the land for the park.
"There's no way we can do that," Mr. Darwish said. "We can't give up our land to Israel."
Elsewhere, Elad and other private builders encouraged by the government are staking out more ground around the capital.
Another Mount of Olives community known as Maale HaZeitim already has 50 apartments, with another 60 under construction. The plans, approved by Mr. Netanyahu the last time he was prime minister in 1997, call for a further 104 units across the road.
A luxury development of 370 apartments, 90 of them completed, is taking shape in the southeast section of Jerusalem in the Arab neighbourhood of Jabel Mukaber.
In Silwan, the Ateret Cohanim group has constructed a seven-storey building known as Beit Yonathan, named for Jonathan Pollard, an Israeli imprisoned in the United States for spying. The problem with this complex, however, is that it was built without a permit.
As would happen with a Palestinian home built without permission, the Israeli court ruled it illegal and ordered an eviction. Jerusalem's mayor, Nir Barkat, favours leaving the Jewish home alone. He said he will order the people out, but will then also order that some 200 Arab homes lacking proper permits be demolished.
In the central Arab neighbourhood of Sheikh Jarrah, several Palestinian families were removed from homes they had lived in for 50 years when another Jewish organization produced documents that showed Jewish title to the homes prior to 1948.
"No one disputes the fact that they have a legal right to the homes," said Ms. Noy of Ir Amim.
"But it's a political mistake to do this."
"At a certain point," she said, "they [all the takeovers]will make negotiation impossible."
Ms. Noy says her organization tries to be realistic. "There are almost 200,000 Jews living in east Jerusalem," she said, "and there's no way all of them are ever going to leave."
She notes that while the international community considers all the areas to be occupied territory, Ir Amim distinguishes between the bigger, more established neighbourhoods - such as Pisgat Zeev and French Hill - and the newer settlements.
"We accept the older ones," she said. "They'll have to stay as part of Israel. But the new right-wing settlements are driving a stake through the heart of the Arab communities."
"They have to be stopped."