JERUSALEM (AFP) -- Israel's Prime Minister Benjamin Netanyahu on Sunday reaffirmed his intent to keep Jerusalem the country's "undivided capital," in a speech announcing a $100-million investment package for the occupied holy city.
Speaking at a special meeting of his cabinet held inside the Old City walls, Netanyahu repeatedly vowed that he would not divide the city, despite international pressure for Israel and the Palestinians to share Jerusalem.
Israel captured East Jerusalem during the 1967 Six Day War, later annexing it in a move not recognized by the international community. In the early years of the millennium, Israel built its separation wall around the city, dividing Palestinian communities on its outskirts from their neighbors.
Israel marks the city's "reunification" on Jerusalem Day, which this year falls on June 1.
"The city was united 44 years ago, and we returned to our ancestral lands. Since then Jerusalem has flourished," Netanyahu said at the beginning of the cabinet meeting at the Tower of David museum in the Old City in occupied East Jerusalem.
"Today we are strengthening its foundations and assisting its residents," he said announcing the multi-year package, which includes funding to boost tourism, grants for students, and incentives for bio-technology companies.
East Jerusalem Palestinians, according to 2010 statistics, lacked some 9,000 spaces in public schools, forcing students into private schools or home-schooling as families waited for a space.
"It is important the entire world knows that the Jewish people and our friends around the world stand together, faithful to Jerusalem and our heritage, steadfast in their positions, insisting on our security and extending a hand in genuine peace to our neighbors," Netanyahu said.
"We will rehabilitate heritage sites that are important to the state of Israel and our people," he said, adding that "the government and the people are bound as one to build up Jerusalem, the heart of the nation."
Israeli projects in Jerusalem are often flashpoints for anger and conflict, and some are illegal under international law. Palestinians in the city harbor a great deal of mistrust for the Israeli administration, describing most action in the city as attempts to strengthen Israeli control over Palestinian landmarks and history.
One of Israel's projects in the occupied city has been to establish guarded Jewish-only settlement neighborhoods in the heart of Palestinian communities. The trend began in 1980, when Israel passed a law stating Jerusalem was Israel's "eternal and indivisible" capital.
Israeli human rights groups say Palestinian residents of Jerusalem suffer from discrimination, in particular being routinely denied housing permits. The Israeli Committee Against Home Demolitions says that between 2004-8, 494 East Jerusalem homes have been demolished, and 3,753 buildings have standing demolition orders on them.
Israeli projects in East Jerusalem have frequently sparked clashes between police and Palestinians in flashpoint neighborhoods including Sheikh Jarrah and Silwan, the latter where Israel's Jerusalem municipality is planning to demolish 88 homes for the creation of a public park.
Israel's ongoing authorization of settlement construction in neighborhoods in the city's eastern sector has drawn criticism from the Palestinians and the international community.