RAMALLAH // Palestinians yesterday welcomed news of an Arab fund to prevent further Israeli encroachment on East Jerusalem.
Proposed by Qatar's emir at the Arab League summit in Doha on Tuesday, the US$1 billion (Dh3.67bn) fund would protect Arab and Islamic rights of the city's estimated 300,000 Palestinian residents, who face pressure from Jewish settlers and harsh restrictions from Israeli authorities.
A draft resolution from the Arab League said the fund would finance projects and programmes to help Palestinians in the city.
"Jerusalem cannot be compromised. Israel must realise this," Sheikh Hamad bin Khalifa Al Thani said on Tuesday, pledging a $250m (Dh918m) Qatari contribution.
He did not elaborate on the precise purpose of the fund and how the money would be spent.
Palestinians want East Jerusalem as the capital of their state, which would also include the other occupied Palestinian territories - the West Bank and Gaza Strip - captured by Israel in the 1967 Arab-Israeli war.
Saeb Erekat, chief Palestinian peace negotiator, called the fund a "great step" for safeguarding Jerusalem's Palestinian and Islamic character. "It's crucial that we help Palestinians in East Jerusalem sustain themselves economically, culturally, religiously, commercially," he said in Doha.
It was also unclear how projects financed by the fund, to be managed by the Jeddah-based Islamic Development Bank, could be channelled to Palestinians without the acceptance of Israel, which governs the city.
Yigal Palmor, an Israeli foreign ministry spokesperson, on Tuesday rejected the Qatari initiative as a "badge of shame".
Israel annexed East Jerusalem nearly 50 years ago and, despite tentative offers by Israeli leaders to divide it with Palestinians during peace negotiations, the city is officially referred to as the "undivided, eternal capital of the Jewish people".
Many fear the influx of almost 200,000 Jewish settlers in East Jerusalem, home to sites holy to Muslims, Jews and Christians, have now rendered it nearly impossible to divide the city to serve as capitals of Israeli and a Palestinian states.
Mahmoud Abbas, president of the Palestinian Authority (PA), said Israeli plans in the city were "destructive".
"The Israeli occupation is systematically and continuously working toward Judaising East Jerusalem," he said in Doha.
Palestinians in Jerusalem face numerous restrictions and neglect, including a lack of municipal services that has exacerbated Palestinian poverty.
The PA, which administers West Bank Palestinians, has no remit in Jerusalem.
The Qatari emir's announcement comes a week after Barack Obama visited Israel, the West Bank and Jordan. Many Palestinians criticised the US president for failing to offer concrete plans to end Israeli occupation.
Ziad Hammouri, director of the Jerusalem Centre for Social and Economic Rights, said the development fund would be vital for addressing a severe shortage of homes and classrooms for Palestinians in the city.
But he was unsure whether the Arab states would follow through on their pledge, citing a similar failure last year to pay $100 million a month to the PA in emergency funds to compensate for Israel's refusal to disburse Palestinian tax revenues.
Israel, which collects those funds on behalf of the PA, withheld the money as retaliation for Palestinian recognition in November by the United Nations as a non-member-observer state. This week, Israel agreed to start paying over the tax funds.
Mr Hammouri also said the settler presence in East Jerusalem could too large of an impediment for the Palestinians to overcome. "Jerusalem may already be lost as the Palestinian capital. There are just too many settlers now," he said.
*With additional reporting by Reuters