A holy city, but for whom?: When Yitzhak Rabin meets George Bush today, Jerusalem will not be discussed. Sarah Helm explains why a key to peace is off the agenda

One of Yitzhak Rabin's election promises was that he would talk about 'peace' and not just the 'peace process'. He has now been the Prime Minister of Israel for one month and appears to be doing just that.

He has met the US Secretary of State, James Baker, in Jerusalem, promising to curb the majority of Jewish settlements. He has held a summit in Cairo with Hosni Mubarak, the Egyptian President, whom he has invited to talks in Israel. Today he holds talks in Kennebunkport with President George Bush, in the hope that his swift demonstration of good intent, particularly on the settlement freeze, has proved enough for the US to release dollars 10bn (pounds 5.2bn) in loan guarantees. The sudden sense of movement, however, only serves to highlight the obstacles facing the negotiations, which begin again later this month.

Mr Rabin knows that the question of sovereignty over Jerusalem is the biggest booby trap of all and could blow the entire peace process apart. For this reason, he will ask Mr Bush today for assurances that the issue is kept off the agenda. He will also say that he intends to exclude Jewish settlement in East and 'greater' Jerusalem from the proposed freeze.

Israel says that only the Jews have the right to claim all of Jerusalem as their capital. Before the 1948 War of Independence, goes the argument, Israel was ready to agree on international status for Jerusalem, but the Arabs rejected the proposal, thereby losing their claim. During the war, West Jerusalem fell into Israel's hands, while the eastern sector, which includes the Old City, remained Jordanian, divided by the Green Line.

Between 1948 and 1967, the Palestinians made no attempt to make East Jerusalem their capital: evidence, say the Israelis, that they have no real stake in the city. Israel seized East Jerusalem along with the West Bank and Gaza during the 1967 Six-Day War. Since then, the Palestinian East has been annexed by the Israeli West side and heavily settled by Jews. Israel has declared the city its united capital, despite worldwide condemnation.

Since 1967, the UN has called repeatedly on Israel to refrain from any action that would change the city's status while sovereignty is still in dispute. 'Any action' means primarily the building of settlements. Until recently, the US has insisted on a freeze on settlement in East Jersualem as well as in the West Bank and Gaza.

For the negotiators of the peace talks, the long-term questions are: whether East Jerusalem should be handed back to the Palestinians, perhaps to be the capital of their state; whether the whole city should be granted some form of international status; or whether Israeli sovereignty should be conceded over East and West. But because the issue has derailed peace talks in the past, this time it has been placed so far down the track that it is not even visible.

According to agreements struck at the Madrid conference last October, the final decision on sovereignty over the whole of Jerusalem would not be discussed at the first stage of talks. To start, the sides would only discuss the nature of Palestinian self-rule in the occupied territories.

However, the Palestinians say that deferring the question of 'final status' does not bar them from talking about East Jerusalem in the context of the autonomy talks. 'Legally and in every way, East Jerusalem is part of the occupied territories,' says the Palestinian leader Hannan Ashrawi. 'It must be part of the territory of the interim self-government authority and it must be the seat of that authority.'

The US is happy to defer discussion of Jerusalem because it knows the Israelis will allow no progress if the subject is on the agenda. It suits the Israelis to defer because they hope to put the question off for ever. But the Palestinians know that the longer it is delayed the more confidently Israel will declare sovereignty over the whole city. In his inaugural speech as Prime Minister, Mr Rabin said: 'United Jerusalem has been and will for ever be the capital of the Jewish people, under Israeli sovereignty. Israel is firm in its resolve that Jerusalem will not be open to negotiation.'

Shelving the problem gives time for what the UN calls 'action to change the city's status'. If the talks proceed at their present pace, there may eventually be nothing left to discuss: the insidious process of land seizure and illegal Jewish building in Arab East Jerusalem will be complete. Not only does Mr Rabin propose to continue building across the Green Line, he also wants to continue building well beyond the municipal boundaries.

Israel says it has a 'united city'. In fact, annexation has only produced apartheid. Apart from the need to find a political solution to Jerusalem's status, the social problems the settlement drive has caused also requires drastic action.

At the huge construction site of Pisgat Ze'ev, for example, the plan is to create 5,000 new Jewish homes in less than two years on one of the few remaining open spaces in Arab East Jerusalem. The settlement has been built on land belonging to Palestinians of the Beit Hanina suburb nearby, who are deprived of most municipal services and cannot build on the land that has been left them.

The Jewish takeover of East Jerusalem began immediately after the 1967 annexation. Inside the enlarged new area of all Jerusalem, the population mix in 1967 was about 22 per cent Palestinian and 78 per cent Jewish. The challenge for Israel was to keep it this way in the face of higher birthrates among the Arabs. A massive immigration programme was begun that has lifted the Jewish presence in East Jerusalem to almost 50 per cent. By 2000, it is expected to be 75 per cent.

The optimists say that deferring the Jerusalem question is the only sensible approach, and that once agreement has been reached on easier issues, the two sides will feel greater pressure to strike a deal. If this were a realistic hope, the very least the international community could do is insist there is no more Jewish building in the so-called 'greater Jerusalem'.

However, with Mr Bush seeking swift progress in the talks, that seems unlikely. Even though, as a goodwill gesture, he has invited the Palestinian leaders Faisal Husseini and Mrs Ashrawi to the White House during the coming peace talks, Mr Bush has not offered substantial US backing on the Jerusalem question.

If they choose to do so, the Palestinians could still play the Jerusalem card at the earliest stage of the talks. Not only could they insist on Jerusalem as the seat for the proposed self-rule authority, they could also demand that East Jerusalem Palestinians vote and stand for election. Mr Rabin has said that he will allow the former, but not the latter. Thus, Mr Husseini, the de-facto Palestinian leader, who lives in East Jerusalem, will be barred from standing, as will Mrs Ashrawi, who also holds East Jerusalem identity.

If the Palestinians do not push Jerusalem to the top of the agenda, it seems certain they will lose their claim to a share of the city. If they do take action, however, particularly without US support, the entire peace process could fall apart. As the city's mayor, Teddy Kollek, remarked in an interview with the Independent: 'If they say Jerusalem is the price of peace, to hell with them. There will be no peace.'

(Photograph omitted)