Israeli bulldozers stir thick white dust, while construction cranes add new layers of pale Jerusalem stone one at a time in the Jewish settlement of Pisgat Zeev on the outskirts of the Holy City.
For Israeli Jews, the growth of these and other settlements within a few miles of Jerusalem's Old City - where worn flagstones and holy sites have been fought over for centuries by Christians, Muslims, and Jews alike - reinforce historic Jewish claims to once-Arab territories of East Jerusalem.
Building here and in other Jewish neighborhoods has begun again with renewed vigor since the election of a right-wing government last May.
The new rationale is simple: The more "facts on the ground" - Jewish housing units already built - the less land Jews are likely to be forced to give up during "final-status" talks that will determine Jerusalem's future as part of the 1993 Oslo peace accords.
The previous Israeli government checked such settlement growth for four years to encourage peace with the Palestinians.
But within days of the victory of Prime Minister Benjamin Netanyahu, Jewish settlers declared that they would multiply their numbers in Jerusalem and across the occupied West Bank, land that they call by the Biblical names of Judea and Samaria, and consider theirs by birthright.
Mr. Netanyahu speaks of ensuring a "critical mass" of Jews, but the settler expansion violates the spirit of the peace agreement, his critics say.
For most Palestinians, Israel is rushing to "Judaize" Jerusalem with hilltop bastions and a demographic advantage. "These are fortresses!" exclaims Ibrahim Matar, an authority on Israeli building in East Jerusalem. Driving past Pisgat Zeev, he laments the tightly packed units with barred windows and high, menacing security fences.
When the final-status talks begin - sometime after a deal is struck on the disputed West Bank town of Hebron - Mr. Matar wonders if there will be anything left to negotiate. "They are creating facts on the ground, contrary to international law, the will of the United Nations, and the US," he says. "These are the 'New Walls of Jerusalem.' "
The world's three great monotheistic religions converge here. But Israeli changes are nearly irreversible, experts say - a feat orchestrated to ensure the city that Israel calls its "eternal, undivided capital" will always be under Jewish control.
In what one human rights group calls a "crusade" against Arab residents, Netanyahu's government has stepped up destruction of "illegal" Arab buildings - built without hard-to-get permits - and approved thousands of new Jewish houses in the occupied territories.
The highest-profile demolition took place at the end of August in the Old City, when, before dawn, Israeli police used a crane to hoist a bulldozer over the city walls, using it to flatten an unfinished Palestinian community center that had been financed by Canadian and Swedish donors.
Further exacerbating tensions in Jerusalem is the inequality of Arab and Jewish life in the city. Jerusalem's Jews outnumber the Arabs nearly 3 to 1, but the Palestinian sectors are granted only a fraction of public funds - some 8 percent - increasing economic resentment.
Also, in this highly politicized city, the moderate middle - a core of secular Israeli Jews - is fed up and fleeing to Tel Aviv, leaving Orthodox Jews and Arabs eyeing each other suspiciously.
Jerusalem could become a "backwater capital of clerics, bureaucrats, and yeshiva students," says one Israeli.
Slow, steady Jewish expansion
Since Israel captured Arab East Jerusalem in 1967, the city boundaries were redrawn to include occupied Arab land and unbridled building of Jewish homes, leaving Arabs a slight minority even in the east.
In 1967, Israeli planners were given simple instructions, says Gershon Baskin, director of the Israel/Palestine Center for Research and Information: Maximize land space and minimize the number of Arabs in its borders. "This whole Jerusalem map is a fiction," Mr. Baskin says. "It's a question of political control, a patchwork quilt created so that Israel can play demographic games."
Strategic locations of Jewish settlements make clear that Ramot and Neve Yaakov form the northern "front" of the Jewish encirclement of the city. To the east, Maale Adumim is creeping toward Jerusalem. And Gilo and East Talpiot form the southern "frontier."
An new settlement approved for Har Homa would fill the southern gap, though liberal activists are trying to stop it. It would lie near Arab-controlled Bethlehem and 1,000 yards from the town's Church of the Nativity.
West Jerusalem has been under Israeli control since 1948, when Arabs were evicted and Israel gained statehood. A town-planning scheme from 1978 explains current policy, warning that "every area of the city that is not settled by Jews is in danger of being detached from Israel and transferred to Arab control."
Israeli methods include expropriation of Arab land for "public purpose" and creating "Green Zones" where Arab building is forbidden.
Ehud Olmert, Jerusalem's right-wing mayor, says his main challenge is to treat all the city's residents equally, but adds that he wants "more and more" Jews to strengthen the Jewish majority.
"We plan to build massively, for Jews," he says in an interview. But the Palestinian view that "new walls" are being created around Jerusalem to isolate it from the West Bank "is crazy," he says.
"The Arabs are fighting to claim part of Jerusalem for political reasons - they will not get it," he says. "I don't know any city in the world where a national minority is entitled automatically to have sovereignty, and it won't happen in Jerusalem."
Bridging the economic divide
Mr. Olmert, who is under scrutiny for his alleged role in a Likud party fund-raising scam, ordered an assessment of needs in Arab East Jerusalem when he first took office.
The resulting plan would spend $46 million on roads and education, and $184 million on "basic investments." It could help "reduce tension," he says, but the city doesn't have the money to pay for the plan.
"It's a moral obligation, [the Arabs] deserve it," Olmert says. His "dream," he says, is for East Jerusalem to be as clean, developed, and modern as the West side.
"I believe [equality] is his dream, but when he wakes up in the morning it disappears," says opposition City Councilwoman Anat Hoffman. Olmert's report has "sat on the shelf" since it was compiled, she says.
In 1989, when Ms. Hoffman was elected, she says, public restrooms at the main bus station on the West side got 48 rolls of toilet paper every three days. The East side station had gotten none since 1967. "It has taken us years to get toilet paper to the East Jerusalem station," she says.
Problems today are far worse, Hoffman says. At public schools on the East side, the dropout rate among Arab boys is 59 percent. Just 53 percent of students graduate, creating a "walking time bomb," she says. Other services such as garbage collection and street lights are as neglected as the schools.
"When Palestinians complain that Israel is not giving them a fair shake, it's true," she says. "We're wasting one of our biggest assets. Who will we make peace with if people don't pass the seventh grade?"
Organizations that monitor living standards say the segregationist policy has impoverished Arabs and forced many to leave Jerusalem.
"The ongoing policy of Israel is to choke Palestinian development and build on expropriated land," says Eitan Felner, author of a 1995 study on East Jerusalem for B'tselem, the Israeli Information Center for Human Rights in the Occupied Territories (IPCRI).
"Israel all these years was talking about coexistence with Palestinians, but at the same time followed a clear policy of discrimination," he says. Most land expropriated since 1967 was Arab-owned, and of the 73,770 housing units built from then until February 1995, the study notes, 88 percent were built for Jews.
"For Palestinians living in Jerusalem, the city is not just a symbol of great religions," Mr. Felner says, "but a place to live, where it is becoming more difficult to do so."
Among the optimists for the future is Daniel Seidemann, an attorney with Ir Shalem, which monitors Jewish takeover of properties in the Muslim portion of the Old City.
"Jerusalem has been changed, but not in such a way as to make coexistence impossible," Mr. Seidemann says. "But there must be a conceptual switch: Before Jerusalem belongs to God and religion, it must belong to real live people, with real live aspirations.... Even in Jerusalem, sewage follows the law of gravity, not laws of ideology."
Still, no other city is so infused with history and theology. Jerusalem is mentioned 656 times in the Bible's Old Testament alone. When Israel formally annexed East Jerusalem in 1980, the UN Security Council voted unanimously against Israel's "prolonged occupation."
Battles continue as they have for centuries. Current celebrations of Jerusalem's 3,000th anniversary, for example, have been widely boycotted by Palestinians because they mark the year King David founded the city.
More recently, violence flared in October - leaving 79 people dead - when officials opened the exit of an archeological tunnel in the Muslim quarter.
During a secret nighttime operation, Mayor Olmert was reported to have personally chipped away the last few inches of the tunnel, which Muslims mistakenly claim cuts beneath Temple Mount on which sits the Dome of the Rock, Islam's third-holiest shrine.
Teddy Kollek, the moderate former mayor of 28 years, decries the de facto segregation. But he compares patchy progress between Arab and Jew to that between whites and blacks in the US, and points out that many American cities are equally "divided".
In Jerusalem, integration isn't helped by Palestinian apathy. "There has never been a coherent Palestinian strategy for Jerusalem, only counterstrategies to Israeli strategies," says IPCRI's Baskin.
Secular Jews split
Compounding the equation is another rift - also widening - between Jerusalem's fast-growing ultra-Orthodox Jewish community and fast-leaving secular Jews. It is a battle, says one senior government official, "that the secular are losing." And it's a battle that matters, because secular Jews, who are generally more tolerant of Arab concerns, tend to calm an otherwise polarized city.
Ultra-Orthodox families are large, and 54 percent of the children who started school in Jerusalem this year are ultra-Orthodox. Mayor Olmert came to power because of support from a coalition of ultra-Orthodox and religious parties, so their agenda is a high priority.
Roads that pass through strictly ultra-Orthodox neighborhoods are closed on Saturday, the Jewish sabbath, and attempts by the government to keep some open have resulted in riots.
"The secular are leaving. Why?" asks a senior Israeli official in Jerusalem. "It is impossible to have a mixed neighborhood, and already two-thirds of the population is either Arab or ultra-Orthodox. If you want to drive across the city on Saturday [the sabbath, when Orthodox don't use mechanical devices such as cars], the chances are small you will end your journey in one piece."
By one estimate, 14 of every 15 people moving to Jerusalem are ultra-Orthodox, while 9 out of 10 who are exiting are secular Jews.
The ultra-Orthodox spend full-time lives of religious study and are subsidized by the state. No religious institution pays taxes either, so Jerusalem faces bankruptcy.
"Don't worry," Hirsh Goodman, editor of the Jerusalem Report, says drily. "The ultra-Orthodox will always make sure there are enough of us [secular Jews] to pay the taxes."
New ultra-Orthodox neighborhoods on the edges of Jerusalem also make Arabs feel their claims are being undermined. Driving through the nearly completed ultra-Orthodox settlement of Reches Shuafat, Matar stops quickly to avoid hitting children at play. Here are the "New Walls of Jerusalem" being thrown up before him, and he is angry.
"Nothing is impossible. Nothing is irreversible," he says, starting the car. "Jews reversed 2,000 years of history, uprooted 350 of our villages, and replaced our people with Jews.
"This is the atomic age - anything is possible," he says.