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Club-wielding Israeli riot police evicted two Palestinian families from their homes in occupied east Jerusalem yesterday, defying international protests over Jewish settlement activity in the area.

Clashes erupted after police moved in at dawn around the homes in the up-market Arab district of Sheikh Jarrah following an Israeli court decision ordering the eviction of the 53 Palestinians, including 19 minors.

"I was born in this house and so were my children," said Maher Hanoun, whose family was evicted along with the neighbouring Ghawi household. "Now we are on the streets. We have become refugees."

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Israel's Supreme Court ordered the evictions following an appeal by the Nahalat Shimon International settler group, which claimed Jewish settlers have title deeds for the properties, despite UN and Palestinian denials.

Jerusalem authorities have also given permission for the construction of about 20 homes in Sheikh Jarrah, in defiance of global calls for a halt to settlement activity in occupied east Jerusalem and the West Bank.

Sheikh Jarrah is one of the most sensitive neighbourhoods closest to the so-called Green Line separating east and west Jerusalem, with the fate of the city one of the thorniest issues in the Israeli-Palestinian conflict.

As some settlers carried boxes containing the belongings of the expelled families to a truck, others moved into the houses holding drills, shovels and ladders.

Police clashed with protesters and detained around 10 people.

"We are all afraid of being kicked out," said Amal Kassem, a Sheikh Jarrah resident for more than five decades.

She said Jewish settlers were holding "fake title deeds" to homes that Palestinians obtained in line with a deal struck between Jordan and the United Nations agency for refugees in 1956, when Jordan had jurisdiction over the area.

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Senior Palestinian negotiator Saeb Erakat expressed outrage.

"Israel is once again showing its utter failure to respect international law," he told reporters.

"New settlers from abroad are accommodating themselves and their belongings in the Palestinian houses and 19 newly homeless children will have nowhere to sleep."

The evictions also drew strong words from Israel's closest ally, the United States, which in recent months has placed increasing pressure on the Jewish state to halt settlement construction.

"The eviction of families and demolition of homes in east Jerusalem is not in keeping with Israeli obligations," said a senior U.S. diplomat, describing the evictions as "provocative."

"Unilateral actions taken by either party cannot prejudge the outcome of negotiations and will not be recognized by the international community," the diplomat said, speaking on condition of anonymity.

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The UN, too, condemned the actions.

"I deplore the totally unacceptable actions by Israel in which Israeli security forces evicted Palestinian refugee families ... to allow settlers to take possession of their properties," said Richard Miron of the UN Special Co-ordinator for the Middle East Peace Process.

The British consulate, which is in Sheikh Jarrah along with several other foreign missions, echoed the view.

"The Israelis' claim that the imposition of extremist Jewish settlers into this ancient Arab neighbourhood is a matter for the courts or the municipality is unacceptable," it said in a statement.

"These actions are incompatible with the Israeli-professed desire for peace. We urge Israel not to allow the extremists to set the agenda."

Israel captured east Jerusalem in the 1967 Six-Day War and later annexed it in a move not recognized by the international community.

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It sees all of Jerusalem as its "eternal, undivided" capital and does not consider construction in east Jerusalem to be settlement activity.

The Palestinians want to make east Jerusalem - home to some 200,000 Jewish Israelis and 268,000 Palestinians - the capital of their future state.

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