Occupied East Jerusalem - With a dramatic wave of his arm out the car window, Sheikh Abdullah Alqam signalled the invisible line that marks the Jerusalem municipal boundary.

"You just left the Palestinian Authority area. Now you are in Jerusalem!" he bellowed, passing a bin that overflowed with rubbish.

"All of this waste will be burned," added Sheikh Alqam, 53, a community leader for Palestinian neighbourhoods across occupied East Jerusalem.

Across the unseen border, the smooth asphalt road gives way to a dusty, uneven surface. Two wide lanes merge into a single unmarked track, and the painted pavements end.

Climbing slowly through the narrow streets, where drivers jostle for every inch of space, the sheikh described the different taxes that residents pay. In return, they receive partial or no municipal services. After a short while, he parked.

"Here it is - the new road," he said. "This part was finished in early April."

A 1,200 metre stretch of asphalt coated with a thin layer of dust, this road would be unremarkable in most parts of Jerusalem. But the new thoroughfare, which links the neighbourhoods of Ras Khamis and the Shuafat refugee camp, is an innovative achievement for the community here.

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Three years ago, residents of Ras Khamis and the Shuafat camp established a local council to try and solve the growing list of problems created by years of municipal neglect.

"We decided to solve these daily problems ourselves," said Abed Mohammed Ali, 40, a local resident and founding member of the council. "The situation was miserable. There was no sewage system and it flooded all the time."

The previous road had huge potholes, he added: "If you had a car, you had to fix it every two months because the roads were so bad. You could not park your car near your home because there was no space on the street. These kinds of issues led to problems between the people."

The situation was miserable. There was no sewage system and it flooded all the time ... If you had a car, you had to fix it every two months because the roads were so bad. Abed Mohammed Ali, East Jerusalem resident

The council raised most of the funds for the road project from within the affected neighbourhoods, gathering small donations each week after Friday prayers.

"We did a pilot project first, repaving around 300 metres of the road. And after the people saw this completed, we gained their trust. After that, they started to give us money so we could continue," Ali said.

Over three years, they managed to raise 500,000 shekels ($133,000) from the community, with donations ranging from 20 to 1,000 shekels, Ali said. The Palestinian Authority also provided a contract worth 200,000 ($53,000) shekels for the asphalt.

Local residents say the new road, completed last month, has significantly improved their daily lives.

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"It has completely changed the situation, 360 degrees," said Khalil Halabi, 62, who donated funds to the initiative. "We were suffering from the dust and the street was filled with holes that used to flood. It was dangerous for everyone.

"It has solved a huge part of the parking problem in the neighbourhood," he added, noting that he would happily donate to similar schemes in the future.

While the Shuafat and Ras Khamis area falls within the Jerusalem municipal boundary and its residents are permanent residents of the city, it has been neglected by the local government for decades.

The Shuafat refugee camp receives services from the United Nations refugee agency (UNRWA), but since the completion of Israel's separation wall in the mid-2000s, the adjoining neighbourhoods have been effectively abandoned.

Although Israeli security services sometimes enter to demolish homes or arrest suspects, Israeli police do not serve the community. Palestinian police are also not allowed to enter the Jerusalem area, leading to a state of localised lawlessness.

Meanwhile, rubbish collection, sewage systems, road and water infrastructure, education, healthcare and emergency services are either partially provided based on outdated population estimates, or absent entirely.

Such problems are common in the East Jerusalem neighbourhoods that were effectively severed from the city by the separation wall. In a June 2015 report, the Israeli human rights NGO, Ir Amim, noted that these areas are pervaded by a sense of "neglect and abandonment".

"The neighbourhoods beyond the barrier are the ultimate manifestation of the central policy towards Palestinians in East Jerusalem," said Judith Oppenheimer, the executive director of Ir Amim. "There has been a constant pressure on East Jerusalemites, [through means such as] limiting their development, restricting planning and construction, attacks on permanent residency and ongoing neglect."

The separation wall was used as a political tool "to create new facts on the ground and to leave tens of thousands of East Jerusalem residents outside of the new barrier", she added.

Up to 100,000 East Jerusalem residents are thought to live in the neighbourhoods outside of the barrier. In October 2015, Israeli Prime Minister Benjamin Netanyahu raised the possibility of cancelling the Jerusalem permanent residency status of this specific group.

For now, community leaders in the Shuafat refugee camp say that they want to begin fundraising for their next project in the coming months. After years waiting, the community has received permission from the municipality to pave another, longer road from the camp to the nearby Anata neighbourhood.

"We hope the next road is going to solve the overcrowding problem for good," Ali said.