ISRAEL IS considering extending to east Jerusalem a law on abandoned properties, allowing the state to take control of Palestinian property worth millions of euro.

If the Israeli courts approve the move, the government will be entitled to take control of east Jerusalem buildings whose owners moved to enemy states during the 1948-9 Arab-Israeli war, Israel’s war of independence, and property owned by people living in the West Bank.

Israel captured east Jerusalem during the 1967 Arab-Israeli Six-Day War. The Palestinians seek east Jerusalem as the future capital of an independent state.

The fate of Jerusalem is one of the most contentious issues to be decided during peace talks between Israel and the Palestinians. Any unilateral decision by Israel altering the delicate status quo is bound to provoke an angry response from both the Palestinians and the international community.

Israeli prime minister Binyamin Netanyahu, who views the whole of Jerusalem as Israel’s united capital, refused to give any public pledges, but reportedly promised US officials that Israel would refrain from “provocations” in Jerusalem during the period of peace talks with the Palestinians.

On Sunday, European Union foreign policy chief Catherine Ashton, speaking at a news conference after talks with Israeli foreign minister Avigdor Lieberman, voiced concern that Israeli actions in Jerusalem may jeopardise peace prospects.

“My fear about east Jerusalem is seeing changes that will affect our capacity to come to a solution. It continues to concern me that if we are going to get to a solution, we need to avoid measures that make it harder for us to get there.”

Israel’s attorney general Yehuda Weinstein recently informed the supreme court that the state plans to apply the law on abandoned properties to east Jerusalem.

In March 1950 the nascent state of Israel passed the Absentees’ Property Law that allowed property of Palestinian Arabs who fled to neighbouring Arab states, in most cases to avoid the fighting, to be transferred to Jewish ownership. The measure did not apply to the West Bank and east Jerusalem, which remained under Jordanian control until the 1967 war.

After 1967 the status of properties in east Jerusalem became somewhat of a grey area, with the Israeli courts alternating between accepting and rejecting attempts to confiscate Palestinian property based on the 1950 law.

In 1968, respected jurist Meir Shamgar, who was attorney general at the time, ruled that the law should not apply to properties of Palestinians in east Jerusalem whose owners lived in the West Bank, arguing that they could not be classified as “absentee”.

A similar ruling was passed by attorney general Menachem Mazuz in 2005.

“The properties became abandoned due to a unilateral action taken by Israel . . . Essentially these are ‘present owners’, whose property rights were stripped because of a broad, technical formulation of the law.”