Permission to go ahead with the plan to build 132 houses for Jews in the Ras al-Amud district where 11,000 Palestinians live below the Mount of Olives came at a meeting of the Jerusalem Planning Board, where objectors say the officials refused to translate from Hebrew to Arabic.
Yasser Arafat, the Palestinian leader, said yesterday in Gaza that the decision to go ahead with the project was contrary to the Oslo accords under which the future of Jerusalem is to be settled. "This is a very serious breach of what has been agreed upon," he said.
A more immediate problem faces Ali Hamdullah, 41, and his two brothers who live, with their families, in a large white house on one corner of the 3.5 acres where Dr Moskowitz, who lives in Miami, wants to build his settlement.
"We have lived here since 1952 and I was born here," said Mr Hamdullah, a truck driver, waving an eviction notice from Dr Moskowitz's lawyer.
He says that over the past 10 years Jerusalem municipality has used the site, which used to be covered in olive trees, as a rubbish dump. A few trees still protrude from the rubble. Mr Hamdullah said: "We tried to stop them dumping rubbish ...by parking a lorry at the entrance, but the police told us to move it." He adds that the municipality refused to connect the house to the sewage system.
None of this is likely to move Dr Moskowitz, who made his fortune through private hospitals and a bingo parlour. In the past he has given $2.3m (pounds 1.5m) to Ateret Cohanim - "Crown of the Priests" - a settler organisation which has already established 600 Jews in the Muslim quarter of the Old City of Jerusalem. He is closely allied to the right-wing government of Benjamin Netanyahu.
Danny Seidemann, a lawyer for Ir Shalem, a peace group opposed to Jewish settlement in Palestinian districts of Jerusalem, said: "The attempt by Dr Moskowitz, backed by Jerusalem Municipality and by the Minister of the Interior, Mr Eli Suissa, will undoubtedly create a major political problem, similar to that which followed the opening of the tunnel in [the] Old City in September." On that occasion 60 Palestinians and 15 Israelis were killed.
To force through the plan for the 132 houses for Jews in Ras al-Amud, Mr Suissa, who as former head of the Jerusalem Planning Committee supported the Moskowitz project, has said that a Palestinian plan to build 560 houses in the district will be conditional on the creation of the new Jewish neighbourhood.
But Naela Karain, a local resident, said: "This is discrimination against us. We are grossly overcrowded ... We don't want a settlement here as in Hebron."
Mr Suissa, a member of the religious party, Shas, shows no sign of relenting. "The Jews will build and the Arabs will build," he told Israel radio. "Everything will fall into place smoothly."
Faisal Hussein, the Palestinian leader in Jerusalem, says that he believes that, on the contrary, Dr Moskowitz's plan is a "time-bomb".
Jerusalem (Reuter) - One Israeli was killed and three wounded in a drive-by shooting near the West Bank PLO-ruled town of Ramallah yesterday, Israeli emergency services said. Security sources said an Israeli car was fired on by a car bearing number plates issued to Palestinians in the West Bank.