Majeda el-Batsh, who lives with her mother and sister in an old house off El Saraya Street in the heart of the Old City, remembers when her half-brother Hassan came from Amman early in April. "He said he had found a company which wanted to buy our house for $2m and he was trying to get $4m in negotiations. He said they came from the Gulf - Saudi Arabia and Qatar - and they wanted to build a tourist hotel."
The sum offered seemed bizarrely high. In the Muslim quarter in Jerusalem, houses are crowded together behind the Ottoman walls of the Old City and are cramped. The jointly-owned el-Batsch family house on El Saraya street, standing on medieval foundations, is larger than most of its neighbours, but nobody is likely to get permission to build a hotel.
Questioned by his family, Hassan eventually admitted that at least one of the people he was dealing with was an Israeli. Majida says: "We did some digging - helped by Israeli and Palestinian friends - and we found that behind the company in Amman is Ateret Kohanim."
It is a name feared by Palestinians throughout the Old City. In English it means the Crown of the Priest. Dedicated to Judaising the Old City, it started in the mid-1980s, with aid from General Ariel Sharon, then a government minister, to take over houses. Usually the first people in the Muslim quarter would know about it was the appearance of armed men and the blue and white Israeli flag in the house next door.
A government inquiry in 1992 revealed houses were often illegally expropriated - usually through false claims that the owner was absent - and that the takeover campaign was secretly funded by the Likud government with tens of millions of dollars.
Hassan al-Batsh is not the only Palestinian living in Amman to receive an offer. The approach is usually to people who are poor or have recently lost money, but have inherited a share in a building in Jerusalem. With 300,000 Palestinians having been expelled to Jordan from Kuwait after the Gulf war, this is not difficult to do.
Shaker Jawhuri, a Palestinian journalist in Amman working for the Gulf newspaper al-Sharq, said: "I know five families who have been approached to sell their property in Jerusalem."
Usually the meetings took place in the luxury Hyatt Regency hotel in Amman. Middlemen insisted that properties had no tenants. Jawhuri said: "The dealers work to get the cooperation of aspiring youths from Amman to help them find people who own property in Jerusalem." One of them told a property holder that "the Jewish buyer is ready to pay many times whatever an Arab buyer is willing to pay."
The presence of representatives of Jewish settler groups in Jordan is politically explosive because it fulfils the worst fears of Jordanians about the peace treaty signed with Israel last October. In the months since, Jordanian businessmen and officials have increasingly complained that they are getting little out of the treaty by way of business with Israeli companies or aid from the US. Salem Nahas, a writer and opposition leader, said Jordanians were worried that "Israelis might stake claims to 54 religious sites in the country which have biblical significance for them".
Ateret Kohanim itself would not comment immediately about the allegation that it is starting to operate in Jordan, but there is no doubt that the organisation and two other settler groups - Ateret Liyoshna and Elad - still have money available from sums they were given by the Likud government before 1992.
"It is well over $10m," said Danny Seidman, an Israeli lawyer who belongs to Ir Shalem, which monitors takeovers in the Old City. Last month he asked the Supreme Court to force the settlers to return all money illegally obtained under Likud.
Settlers defend themselves by asking why Israelis should not buy property in the Old City. Mr Seidman said the question was disingenuous: "They didn't pay for it with their own money but the government's. They used illegal means to take over the houses." He also said the settlers had a wider political agenda. They wanted to see the peace negotiations between Israel and the Palestinians ended.
"They know that their efforts - if timed correctly - will lead to a breakdown in the process," he said. "They collect properties like players in Monopoly, behind the backs of people living in the houses. Then one night they walk in and start throwing personal effects out the window."
In the el-Batsh family, the offer of $2m led to a furious row. Every day Hassan el-Batsh was in Jerusalem, he was on the phone to his son Jassim ,who was conducting the negotiations in Jordan. "A week after he came we learned there was a draft contract in the files of Ateret Kohanim," Majeda said. "We lived in a nightmare and we are still frightened."
She said the Israeli negotiator, assisted by a Jordanian lawyer, knew every detail about them, but had wrongly assumed "we were an Arab patriarchal family in which Hassan, as the eldest brother, could do what he wanted". In fact the family is much more sophisticated than most in the Old City.
They feel a sense of reponsibility to the house, on the road between the Holy Sepulchre and the Haram al-Sharif, where al-Aqsa mosque stands, and believed that "if we gave it up the Israelis would take over the whole of the Muslim quarter". They had already built a 6ft concrete wall around their small roof garden to protect it from settlers living nearby.
After long argument, the rest of the family agreed that Hassan has the right to sell his portion of the house, but they have the right of veto. Meanwhile his son in Amman found the purchasers had disappeared. Shaker Jawhuri says that the five families he knows about also turned down offers of money for Jerusalem houses. But it seems likely the Israeli groups will have found some takers, and may be waiting until they have accumulated other properties or the return of a Likud government before they move in.
Expropriation of houses by Ateret Kohanim in the Old City is potentially far more explosive than the takeover of 131 acres of Arab land in East Jerusalem which the Israeli Prime Minister, Yitzhak Rabin, suspended last week to avoid losing a motion of no confidence in the Knesset.
Settler activity in Muslim holy places has led to some of the worst violence between Israelis and Palestinians of the past five years. In 1990 leaflets from a Jewish fundamentalist threatening to take over the site of al-Aqsa led to a riot in which soldiers killed 17 Palestinians. In Hebron last year, Baruch Goldstein shot dead 29 worshippers in al-Ibrahimi mosque.
In Jordan, the covert buying campaign to win control of the Old City will exacerbate the fast- growing Jordanian paranoia about Israeli intentions in their country. The Jordanian parliament is already an obstacle to normalisation of relations with Israel. In Jerusalem itself, Danny Seidman said the actions of Ateret Kohanim and other settler organisations was poisoning relations between Israelis and Palestinians so that ultimately, as has already happened in Hebron, "every schoolchild will require a personal guard".