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The steps are piecemeal - building a new religious seminary, buying a few dozen homes from Palestinians. They will not significantly alter the city s demographic balance: In the last two decades, the number of settlers has increased from 1,400 to around 2,600.

But they have brought an influx of ideological settlers to the city, making it far more difficult to divide Jerusalem in a two-state solution, which envisions a Palestinian capital in the east.

It contains the seeds of the Hebronisation of Jerusalem, said Daniel Seidemann, an Israeli lawyer and Jerusalem expert, referring to the West Bank city where a handful of staunchly ideological settlers live under heavy military guard. [It] morphs the conflict from a political one, which can be solved, to a religious conflict that cannot.

The latest flashpoint is in Silwan, a Palestinian neighbourhood perched on a steep hill south of the Old City.

A settler group called the City of David Foundation, commonly known by its Hebrew acronym Elad, purchased seven buildings there containing 22 housing units. Their new Jewish inhabitants started moving in last week. The homes have been outfitted with metal gates and security cameras; armed guards linger outside, and accompany the settlers whenever they leave.

In past cases, Palestinians have been evicted from their homes. This time though, Elad bought the homes legally, working through middlemen, according to residents of the neighbourhood.

A broker came to me two months ago, a Palestinian guy, and he offered to pay me full price for my house, said Mahmoud Abdel Qader, who lives near the base of the hill. One million shekels! He said we could go to the municipality immediately and do the paperwork.

Several other Silwan residents had similar experiences, as did a man from Jabal al-Mukaber, a neighbourhood further south. In each case, they said, the brokers were Palestinians claiming to be affiliated with the Islamic Movement, a religious and social organisation. The group did not respond to a request for comment.

Economy Minister Naftali Bennett, the rising star of Israel s right wing, bluntly outlined the strategy in a video recorded last week.

About 25 years ago, a wonderful organisation decided to return the City of David to Jewish hands, Bennett said, referring to Elad. Slowly, and with patience, it started purchasing homes at full price, and populated them with Jewish families.

Bennett went on to explain that last week s purchases doubled the Jewish population in the area. [Now] there is a Jewish majority, he claimed.

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In fact there is no such thing in Silwan, even in the small area designated as the City of David , where Jews now make up perhaps 20 percent of the population. Activists, however, say the latest wave of settlement is a beachhead, and an obstacle to a future split.

The objective, yes, it s to strengthen the Jewish presence in all areas of East Jerusalem, said Aryeh King, a member of the Jerusalem city council and right-wing activist who founded an organisation devoted to settling Jews in East Jerusalem. This way we can stop, or at least delay, Bibi s idea of dividing the city, and wait for the right political leadership that won t think about this.

King contrasted the purchases with last month s decision by the municipal planning committee to build 2,610 new units in the settlement of Givat Hamatos. Construction there would choke off the Palestinian neighbourhood of Beit Safafa, with serious implications for a two-state solution.

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