Luxury Condos for American Jews (in Arab East Jerusalem)

JERUSALEM–As if cribbed from a page in a Passover Haggadah, the real estate pitch sketches a "Next Year in Jerusalem” vision for the well-heeled: a gated community nestled in a bucolic hillside terrace overlooking a panorama of the Old City walls, the Dome of the Rock, and the Mount of Olives.

Nof Zion, a neighborhood of high-end condos geared to American Jewish buyers, promises a synagogue, a hotel, public gardens, a country club and a "harmonious residential neighborhood."

What the promotional material doesn’t mention is that Nof Zion – which translates to "Zion View" in English — is located in the bosom of Jabel Muqaber, an Arab neighborhood in a section of Jerusalem claimed by Palestinians as the capital of their state-to-be.

Shortly after President Bush visits Jerusalem next week to prod the newly revived peace process, the newest Jewish neighborhood in the Palestinian half of the city is slated to begin filling up as developers distribute keys in the completed 91-unit Phase I of the Jews-only project.

Jerusalem is considered one of the most delicate issues of the peace talks, and every move to change the status quo is pregnant with the possibility for a flare-up. The compromise mulled seven years ago envisioned dividing sovereignty in the city based on Arab and Jewish neighborhoods, but an enclave like Nof Zion complicates that. And the same way that the expansion of the nearby neighborhood of Har Homa has kicked up accusations about eleventh hour Israeli land grabs in Jerusalem ahead of peace talks, plans to build 395 luxury condos 28 acres could become a sore point over the next year of peace talks.

"The U.S. is behind our ruin. I doubt the Americans will stop the settlements,” said Ali, 48, an unemployed resident of Jabel Mukaber, while sipping tea on a balcony which looked across the street to a row of mid-rise condos of salmon-hued Jerusalem stone.

Describing his future neighbors as "settlers" from the U.S., he said: "This is a strategic plan. They come and put this neighborhood in an Arab neighborhood, and in 100 years there will be no more Arab neighborhood."

The developers and marketers behind Nof Zion say they have no political motive. The demand for Israel real estate – especially the coveted view of Jerusalem’s Old City – is so high among religiously observant diaspora Jews that it outweighs the political risk. The market for luxury real estate in Israel – especially in Jerusalem and Tel Aviv – has surged in the past two years as foreign investors snap up properties priced at a relative discount to comparable units in the bloated markets in U.S. and Europe.

"It’s exciting in Yerushalayim to have something that’s gated and self-contained, with the best view of Yerushalayim,” said Gita Galbut, head of U.S. marketing, using the Hebrew word for Jerusalem. "That’s something unusual. I get at least eight phone calls a day."

Price per square foot at Nof Zion has risen from $330 to $440 in a year – though that’s still just half the price of half the price of luxury properties in prestigious neighborhoods in the Jewish western half of the city. Anticipating high demand from Orthodox buyers, apartments have been designed to accommodate large families – the smallest start at about 120 square meters. Sabbath elevators are being installed, and there are plans for a Sephardic and an Ashkenazic synagogue.

Palestinians and left-wing Israeli activists see the development as part of a long pattern to block a political compromise.

The goal of Jewish building in the sections of Jerusalem conquered during the 1967 Six Day War has been to strengthen Israel’s hold over the city by breaking up the Palestinian contiguity with the West Bank and in the city itself, said Danny Seidman, a lawyer who specializes in municipal planning and the founder of Ir Amim, a non-profit that promotes a negotiated division of Jerusalem.

Har Homa, backed by the government and the main source of Israeli-Palestinian tension, blocks off Bethlehem to the south. In recent weeks the newspaper Ha’aretz reported government plans for a neighborhood to secure Jerusalem from Palestinian neighborhoods spreading southward from Ramallah.

For years, nationalist religious ideologues have financed the purchase of individual dwellings for Jews in provocative locations like the Old City’s Muslim Quarter.

"I oppose projects like this because it cuts across the grain of the patterns of life in Jerusalem,” Mr. Seidman said. "In order for there to be a political settlement, there has to be a division. Balkanizing Jerusalem by implanting Israeli enclaves into existing Palestinian neighborhoods makes any political settlement more difficult and hurts stability.”

Anxious to avoid a crisis with the Palestinians ahead of the Bush visit, Prime Minister Ehud Olmert issued a directive to government agencies that any new building in the West Bank must be approved by the cabinet.

But a prime ministerial spokesperson said that doesn’t apply to municipal Jerusalem.

"We have committed ourselves to not do anything that would prejudice a final status agreement,” said Mark Regev, who confessed that he wasn’t familiar with building project. "Obviously in Israel, we understand the sensitivity of Jerusalem, but this directive applies only to the West Bank.”

City planning critics say that the location of Nof Zion breaks up the population continuity between Jabel Mukaber and the Palestinian neighborhood of Silwan. It also happens to be part of the historical basin surrounding the Old City – an area that will be extra-sensitive in the negotiations.

"All small settlements of Jews in the heart of Palestinian neighborhoods make it impossible to divide–it’s an eyesore,” said Efrat Cohen-Bar, an architect with Bimkom, a non-profit advocate of planning rights for Palestinians. “They’re not coming in there to make coexistence, they’re doing something else.”

Critics of Nof Zion project say it hasn’t gotten much attention because it is not a government development project like Har Homa nor a land reclamation by religious ideologues.

Instead of politics, the entrepreneurs behind Nof Zion, Digal Investments and Holdings Ltd.–a real estate developer traded on the Tel Aviv Stock Exchange–are focused on the bottom line. Digal Chief Executive Dror Kaveh argued that objections to Nof Zion on the grounds that they may prejudice a peace treaty were simply efforts to manufacture controversy. He asserted that the housing project is going up on privately owned property and has withstood legal challenges along the way.

"We have all the approvals,” he said. “We are in Jerusalem, it’s private Jewish land, and there is no dispute. We have no impact on politics.”

Still, there’s more to Nof Zion – and the accompanying marketing campaign – than the lure of a good deal.

Ms. Galbut, the U.S. Sales Director, said there’s a "buzz” among her clients about the project, thanks to a marketing campaign targeting community synagogues.

A special push is being made with New York City’s Syrian Jewish community – chief Rabbi Eli Abadi visited the site this year — in the hopes they will purchase units en masse.

Ms. Galbut expects that the first phase – which is 60 percent sold – will max out in the next month, and Phase II marketing will start.

"I tell everyone there is an Arab neighborhood around us," she said, when asked what she tells customers about proximity of Nof Zion to Palestinian neighborhoods; Jabel Mukaber’s absence in the marketing material is otherwise conspicuous. "How can we as Jews not move into areas because we say that we are afraid? We have a responsibility."

The road linking the new neighborhood to central Jerusalem runs along the Haas and Goldman promenades that offer similar views of the Old City. The landmark at the start of Jabel Mukaber is a police station that looks more like an army base. Outside the station at the entrance to the Palestinian neighborhood a giant poster advertising units in the "private" neighborhood for sale.

A newly installed traffic circle starts the descent along a path under construction to upgrade the narrow road to a divided street to accommodate the traffic. Infrastructure in Palestinian neighborhoods in Jerusalem is notoriously underfunded by the municipality, and the lack of street lights or sidewalks make Jabel Mukaber look more like an outlying village than an actual part of the capital.

Though Palestinian residents are grateful for the new road, they say their requests to be hooked up to Nof Zion’s sewage system have been turned down, leaving the Palestinians without a sewage system.

They also complain that Nof Zion has received permission to build five- and six-story buildings while they are limited to two stories. Inside the buildings, illegal Palestinian laborers from Bethlehem put the finishing touches on stairs by day and sleep at night. Even when the buildings are completed, there will be more work on the next phase. "The maps are ready," said Thaeyer Ayad. "They have the land. The just need approval to start building."

The plan to make Nof Zion a gated enclave with 24-hour security stirs worry. "There will be restrictions from one place to another," predicts Ali, the unemployed neighbor of Nof Zion. "In the future there will be gates and guards, and I won’t be able to cross."

But Ms. Galbut, the U.S. marketing agent, insisted the restrictions won’t put a crimp on the neighbors. Theoretically, the Palestinians from the surrounding areas will have access to Nof Zion’s parks if they can tell security guards the name of friends in the development.

"I would never suggest to someone else something that I wouldn’t do for myself,"Ms. Galbut said. "I have seen the Arab women who walk through. I said hello and they say hello."

As the sun sets, the golden dome of the Old City’s Dome of the Rock Mosque begins to glow from the slopes of Jabel Mukaber.

"They first wanted to call it Golden View," joked Mahmoud Abeidat, a local grocery store owner.

Then he looked over to the concrete wall closing off the city from the West Bank.

"They will never give East Jerusalem back to the Palestinians. Beyond the wall, maybe. But inside the wall, never,” he said. "We’ve wished to have peace since 1990, but nothing has happened. Peace is a waste of time.” Luxury Condos for American Jews (in Arab East Jerusalem)