It is being billed as the 'Museum of Tolerance' - a Jewish institution being built in Jerusalem apparently to promote harmony between Muslims and Jews.

But its construction on the site of an ancient Muslim cemetery has outraged Palestinians, who say it is a deliberate attempt to erase their history.

They say the very name of the museum is laughable, and now 60 Palestinians have lodged a petition with several United Nations agencies in a bid to stop its construction.

Mamilla Cemetery, in the heart of Jerusalem, goes back to the earliest days of Islam in the 7th century AD.

Some of those buried here are said to include Muslims who personally knew the Prophet Mohammed, along with more recent scholars and leaders and even Muslim warriors who fought the Crusaders in the 12th century.

For centuries, thousands of graves have been dug on top of each other, at times four or five layers deep.

But Palestinians in Jerusalem fear that history is about to be erased forever.

Proof of inhabitation

Dyala Husseini, a Palestinian with hundreds of ancestors buried at the site, says the cemetery proves Muslim families have lived in the area for centuries.

"It is not only that it is sacred to us as a burial ground, but it proves our existence in Jerusalem as Palestinian and Muslim families since at least 800, 900 years ago," she said.

"This headstone, it says "Sleeps here, the Sheikh Badradeen Mustafah Zean, died in 1161."

Palestinian lawyer Diana Buttu says the Simon Wiesenthal Centre's 'Museum of Tolerance' name is laughable.

"We've already seen tombstones that have been removed, there were times where we saw open graves with wires running through, where the bodies are located," she said.

"And the idea of creating a museum of tolerance in such an intolerant way is very ironic and very disrespectful to the families and to those buried there."

She says 60 Palestinian families are taking their case to the UN's special rapporteur on religious freedom in the hope of generating international support for the case.

"There's a hope that if there's enough pressure brought to bear that the museum will actually stop rather than continue," she said.

'Used to be a car park'

Privately though, Palestinians accept they have little chance of succeeding.

The Israeli Supreme Court already ruled in 2008 that Mamilla was no longer used as a cemetery and any bones found there could be moved.

And the Dean of the Simon Wiesenthal Centre, Rabbi Marvin Hier in Los Angeles, says for 50 years the museum site has been used as a car park.

"We're building on the former municipal car park which for a half a century parked 1,000 cars a day and Muslims, Christians and Jews parked there, every single day, without any protest from any Muslim group for half a century," he said.

"So they can appeal to the moon, the project is going forward."