Israel conquered Jerusalem’s Old City and its environs, along with the West Bank, from Jordan in the 1967 war. Then it expanded the city limits, taking in 28 West Bank villages on the high ground surrounding the city, and annexed the territory in a move that was never internationally recognized. Ever since, its leaders have claimed sovereignty over what they deem Israel’s “united capital.”

But the Palestinians demand East Jerusalem as the capital of their future independent state. They and much of the world see the developments that Israel has built in the annexed area since 1967, now home to some 200,000 Jews, as illegal settlements. These would remain within Israeli Jerusalem under the plan.

The vast majority of the city’s 300,000 Arab residents — about a third of Jerusalem’s population — chose not to apply for Israeli citizenship, but hold permanent residency status that entitles them to social benefits and to work and move freely throughout Israel.

International road maps for peace have long imagined Palestinian control of Jerusalem’s Arab areas and Israeli control of Jewish ones, with a special arrangement for the Old City and its surroundings. But this latest plan — which would remove about two-thirds of Jerusalem’s Arab residents by disconnecting populous outer neighborhoods like Beit Hanina, Sur Baher and Issawiya from the city — comes in the absence of peace talks and amid months of rising violence.

“We have to open a public debate and a parliamentary debate: What is it we want to keep?” said Shaul Arieli, a map specialist who took part in past peace talks and helped formulate the plan. Advancing a unilateral plan for Jerusalem as an interim measure, in the absence of talks for a permanent deal, he said, “shows the Israelis that nothing is holy.”

Mr. Arieli, a reserve colonel in the Israeli Army who participated in the 2000 Camp David negotiations, is among more than 30 Israeli public figures — veterans of the political, diplomatic and security establishments — who signed the campaign ads.