The establishment of these Jewish enclaves appears meant to make partition of Jerusalem along ethnic lines — generally seen as a key aspect of any future peace deal — exceedingly difficult.
Buildings were sold to settler groups in and around the sensitive Old City of Jerusalem at a fraction of the going market rates by governments that were involved in peace talks with the Palestinians, who claim those same areas.
Sharing Jerusalem is one of the touchiest issues facing Mideast negotiations. Several previous rounds have broken down over the fate of the holy city.
A key sticking point is a hilltop in the walled Old City, where the Al-Aqsa Mosque compound sits atop the ruins of the biblical Jewish Temples. Both sides claim the site.
The future of the rest of the Old City and its surroundings is just as contentious.
The Old City is divided into four quarters — Muslim, Jewish, Christian and Armenian — but in past years, populations mixed. In 1948, during the war that followed Israel's creation, Jordan captured the Old City and expelled its Jews.
Israel took the Old City back in the 1967 Mideast war, annexed it and re-established the Jewish Quarter, where today about 4,000 Jews live alongside about 30,000 Palestinians in the rest of the old areas. The annexation has not been internationally recognized.
Palestinians claim east Jerusalem, including the Old City, as the capital of the state they hope to establish. Palestinian negotiators have said they will not compromise over Jerusalem. Formulas have been put forward to divide the city ethnically — placing Jewish neighborhoods in Israel and Arab sections in the new Palestinian state.
But over the years, ultra-nationalist Israeli settler groups have been buying up buildings outside the Jewish Quarter. The documents released Sunday show how the Israeli government has been helping them with bargain land prices.
The documents refer to 11 such deals, but an anti-settlement activist said there are dozens more.
Some of the properties passed on to the settler groups once belonged to Jews but fell into state hands. Arab families had since built on the land but were evicted from the properties when settler groups seized control.
Other properties belonged to Arab residents whom the state deemed to be "absentee owners."
In one case, a 40,000 square feet (3,660 square meter) building just outside the Old City was sold to Jewish settlers in October 2006 for $190,000 — a tiny fraction of its market price. Also that year, an 11,000 square feet (1,057 square meter) building in the Old City was sold for of $69,000, less than the cost of a tiny one-bedroom apartment elsewhere in the city. Other deals featured similar low prices.
Encouraging Jews to live all over Jerusalem has been a common policy of Israeli governments for decades. Jewish neighborhoods built around the outskirts of east Jerusalem are home to more than 180,000 Israelis today.
But the purchase of property in the heart of Palestinian sections raises tough questions.
"This has tremendous implications on both the political future and also on (Jerusalem's) current stability," said Orly Noy of Ir Amim, an Israeli group that supports coexistence in Jerusalem. Ir Amim was not involved in the court battle to obtain the documents but closely followed developments.
"The Israeli government is officially obligated to resolve the (Mideast) conflict through negotiations, but we find out at the same time — left-wing and right-wing governments alike have been cooperating with organizations whose sole goal is to prevent those very same negotiations from succeeding," she said.
On the other hand, if borders are agreed on, a small number of Israelis in a few dozen buildings on the Palestinian side would not likely scuttle implementation of a peace accord. Israel removed 8,000 settlers from the Gaza Strip in 2005 when it withdrew.
The documents were released to anti-settlement activist Dror Etkes after a three-year court battle with the Israel Land Administration, which oversees almost all the country's land.
Etkes wanted the government agency to detail its deals with two shadowy settler groups, Elad and Ateret Cohanim, which have helped move Jews into Arab sections areas of east Jerusalem.
The documents refer to 11 properties that were leased or sold from 2003 to 2008 — by Israeli governments who were, at some points, negotiating with Palestinians to strike a Mideast peace deal.
Etkes said he believed the state was withholding information on other deals because nearly two decades ago, a government-appointed commission identified 68 land transactions involving the state and the two settler groups.
All the properties referred to in the court documents lie in the Old City, and the nearby valley of Silwan, where some 2,000 Jewish settlers are wedged in among about 30,000 Palestinian residents. Violence is common. In September Palestinians rioted for days in east Jerusalem after an armed guard working for Jewish settlers shot dead an Arab man in unclear circumstances.
Ateret Cohanim director Daniel Luria responded that all the group's land transactions are according to Israeli law. Elad did not respond to a request for comment."