"They came on Thursday and took over the house," said Riyad Ghuzlan, a Palestinian journalist who lives on the other side of the road.
Eviction notices were served on the same day on 10 other Palestinian families in Silwan, long the target of religious settlers because it occupies the site of the ancient city of Jerusalem, conquered by King David.
The speed of the action by the settlers, who took over no houses for four years under the Labour government, indicates they now believe they can move safely into Palestinian areas. In Hebron, settlers this week took over a building housing a Turkish bath, which their spokesman said had been Jewish property before a massacre of Jews in the city in 1929.
The expansion of Jewish settlements on the West Bank under Likud is the development most likely to torpedo hopes of preserving the Oslo accords. In a message to settlers in Hebron, Mr Netanyahu expressed "appreciation for your Zionist and pioneering work".
In Silwan, the resumption of takeovers by settlers is generating deep fears among Palestinians. Mr Ghuzlan said he had been fighting a legal battle to keep his house "since 1987, when we received a letter telling us that we had 30 days to leave our home". Khalil Juda is one of those who received an eviction notice last Thursday. People from the district surrounded his house until a lawyer got an injunction giving the family 21 days to appeal.
The takeover of houses in Silwan is being orchestrated by the militant Elad organisation, whose leader, David Beeri, said: "In the last four years we have continued to buy houses from the Arabs." He would not say how much property had been bought: "We don't want to talk about it. We don't want to make a noise about it."
Often, the first that tenants know about their house being sold is when settlers arrive at their door. Danny Seidman, a lawyer for Ir Shalem, a section of Peace Now, which specialises in holding back settlers in Jerusalem, said the money used was illegally obtained from the last Likud government. He pointed to the Klugman report, an official Israeli investigation which said Ariel Sharon, then housing minister, orchestrated the financing of the settlement drive. Mr Seidman said: "The settler organisations still have tens of millions of dollars left from what they received then."
The Klugman report concluded that many Palestinian properties had been obtained illegally by settlers or by quasi-legal means by the government, using tainted evidence.
Despite its finding, the Labour government did not act against Elad or its sister organisation, Ateret Kohanim (Crown of the Priests).
The result of the last settlement drive is that the Old City of Jerusalem and Silwan are dotted with heavily fortified buildings held by settlers.
They are easily identified by their barbed wire fences, Israeli flags and armed guards paid for by the government.