Israel says it hopes the program will improve living conditions in impoverished Palestinian neighbourhoods and give residents access to Israel’s high-tech economy. But Palestinians fear the plan is a way of cementing Israel’s control over the city. Picture: Mahmoud Illean/AP

Jerusalem — A landmark half-billion-dollar Israeli plan to develop Palestinian areas of east Jerusalem and hoist residents out of poverty is getting a cool reception from the very people who are supposed to benefit.

Israel says it hopes the program will improve living conditions in impoverished Palestinian neighbourhoods and grant residents access to Israel's robust economy. But the city's long-neglected Palestinian community views the project with deep scepticism and mistrust, fearing it is a way of cementing Israel's control over the eastern sector after more than 50 years of occupation.

"All these projects have nothing to do with improving our lives," said Ziad Hammoury, who heads the Jerusalem Center for Social and Economic Rights, an advocacy group. "It's about controlling more and more in east Jerusalem."

The "Leading Change" program, launched in May, aims to reduce the huge social gaps between the Palestinian neighbourhoods and the overwhelmingly Jewish western part of the city. After years of neglect, Palestinian neighbourhoods suffer from poor infrastructure, neglect and subpar public services, and nearly 80 percent of the city's Palestinian families live in poverty.

The program will invest 2 billion shekels, or $560 million, in education, infrastructure and helping Palestinian women enter the workforce. The money will be spent on a variety of programs, including nine pilot projects, over five years with the aim of attracting further government and private investment down the road.

A worker walks through the Muslim Quarter of the Old City in Jerusalem. Picture: Mahmoud Illean/AP

The program was instituted by Israel's nationalist government. It opposes any division of the city but appears to have concluded that strengthening Jerusalem's Palestinian areas is also in Israel's interest.

"All those who truly believe in a unified Jerusalem and aspire to full sovereignty must act with determination to govern on one hand and to take responsibility for developing infrastructure on the other," Zeev Elkin, the government's minister for Jerusalem affairs, said at the project's launch in May. Elkin's ministry is expected to play a leading role in implementing the program, and he is running for Jerusalem mayor in elections this year.

The program's designers say they recognize the political sensitivities but contend the economic benefits will be real. They say integrating Palestinians more into Israeli society will provide more opportunities.

"It's a population like every other. It deserves to receive public services like everyone," said Shaul Meridor, the head of the Finance Ministry budget department. "Economically, it is just very clear to everyone that if we help this population to be in better shape, they will benefit and so will everyone else."

Israel captured east Jerusalem in the 1967 Mideast war and annexed it in a move that is not internationally recognized. Israel considers east Jerusalem an indivisible part of its capital, while the Palestinians seek the area, home to the city's most sensitive holy sites, as the capital of a future state.

Since 1967, Palestinian residents of East Jerusalem have been eligible for Israeli citizenship but most have not sought it, believing it would mean recognizing Israeli rule.

Instead, they have residency status, allowing them to work and travel freely in Israel. As non-citizens, they do not vote in Israeli elections. Few use their residency rights to vote in municipal elections, a political statement that denies them a way to influence their daily lives.

Garbage is strewed along an embankment in a Palestinian area of East Jerusalem. Picture: Mahmoud Illean/AP

Palestinians make up 37 percent of Jerusalem's population of 866,000. Despite Israel's portrayal of Jerusalem as united, there are stark differences between Arab and Jewish parts of the city.

West Jerusalem's tidy pedestrian malls and winding bike paths stand in jarring contrast to the garbage-strewn, pot-holed streets of east Jerusalem. Many Palestinians work in menial jobs in the west side, where salaries are higher and work more plentiful. A ring of Jewish neighbourhoods that Israel has built throughout east Jerusalem enjoys the same infrastructure and development as the west side.

One aspect of the new project is to encourage Hebrew language learning and promote the adoption of the Israeli school curriculum as opposed to the Palestinian one, steps organizers say are aimed at opening the doors to Israel's economy. They say the project will also address land-use issues, erect commercial centres and increase access to public services.

Lior Schillat, the director-general of the Jerusalem Institute for Policy Research, called the program "historic," saying it was the first time an Israeli government was investing so heavily in the area's economic development.

In 2014, the government set aside a special budget of 200 million shekels ($55 million) for the area, a fraction of the current project.

The city spends 9 to 11 percent of its budget on Palestinian neighbourhoods, not proportional to their population, said Meir Margalit, a dovish former Jerusalem city council member. A municipality spokeswoman said the city has made "unprecedented" investments in east Jerusalem in recent years.

A shopkeeper waits for customers in the Muslim Quarter of the Old City in Jerusalem. Israel says it hopes the program will improve living conditions in impoverished Palestinian neighbourhoods and give residents access to Israel’s high-tech economy. But Palestinians fear the plan is a way of cementing Israel’s control over the city. Picture: Mahmoud Illean/AP

Organizers say they expect to see marked change brought by the new program within a few short years.

Schillat said there are indications more Palestinians are looking to Israel for economic opportunities rather than the West Bank or the broader Middle East. He said more people are enrolling in Israeli universities and colleges, more are applying for citizenship and half of all employed Palestinian east Jerusalemites work in West Jerusalem or surrounding Jewish towns. He said mistrust might be alleviated once a change is seen on the ground.

Mohammad Owaida, an east Jerusalem resident, an adviser to the Jerusalem Affairs Ministry and a participant in the project, said he is not concerned about the government's intentions so long as the project delivers change.

"I don't care what (Elkin's) agenda is. I care about improving the lives of 400,000 residents," he said, adding that he believed most people agreed with him but were too frightened to speak up.

Others say it is flawed because its conception didn't include a prominent role for east Jerusalemites — few of whom hold government positions — although organizers say they consulted frequently with residents. The project's celebratory launch, held at the Israeli president's residence, included a number of Israeli dignitaries, but few Palestinian faces.

"It's a great project but it came too late and didn't include local representatives," said Ramadan Dabash, one of a handful of Palestinians to ever run for Jerusalem city council. "Who knows east Jerusalem like those who live here?"

Critics also say they've seen past Israeli attempts to address the needs of the city's Palestinians falter.

"These are attempts to basically entice the Palestinian population to waive or dilute their national identity as Palestinians and to go Israeli," said Daniel Seidemann, a Jerusalem expert highly critical of government policies.

His solution to east Jerusalem's problems?

"A border."

AP