It seems nobody thinks much of the hillside Palestinian town of Abu Dis, not even its mayor, who finds it hard to say why he took the job. “For real, I don’t know,” he said. “There’s a lot of crime and drugs.”

When they still lived in a village with stunning views of the golden Dome of the Rock and the Mount of Olives, families from Abu Dis would walk across the valleys into Jerusalem to sell sheep, goats and cheese.

Now, a zig-zagging eight-metre high wall built by the Israeli military has blocked most of the view. More importantly, it has also cut off Abu Dis’s roughly 30,000 residents from their fields and the holy city.

After years of neglect, Donald Trump wants to put this lonely town – with its pulverised streets and often shuttered shops – back on the map. His “vision for peace”, released on Tuesday, seeks to rebrand Abu Dis and nearby districts as part of the capital of the future “state” of Palestine.

The plan, already rejected in its entirety by the Palestinian leadership, broadly mirrors some of the ideas from the extreme far right of Israeli political thinking. It gives Israel ultimate military control over Palestinians and huge sections of occupied Palestinian territory.

At the same time, in an apparent effort to show he wants to address Palestinian grievances, Trump announced what he said were concessions for some of the most prominent Palestinian demands, including the promise of a future state with its capital in East Jerusalem.

Facebook Twitter Pinterest An Israeli flag flutters in front of the Dome of the Rock, seen from the Palestinian village of Abu Dis. Photograph: Emmanuel Dunand/AFP via Getty Images

But the 181-page proposal published shortly after he spoke showed that the details of these pledges effectively made them meaningless. Any Palestinian “state” would not look much like a sovereign country. It would be completely encircled, would have no army or air force, and Israel would continue to control its skies, borders and seas.

Crucially, Israeli forces would have the right to make incursions into Palestine at any time. The document also indicates that the US and Israel could veto Palestinian moves for independence.

Possibly even more misleading was Trump’s assertion that Palestinians would finally realise their decades-old wish to have a capital in East Jerusalem.

This point raised eyebrows from residents of Abu Dis, who described their home as an outlying “village” or a “suburb” at best, and certainly not a central part of Jerusalem they envisioned for their governmental headquarters. Not even Israel considers Abu Dis part of its “undivided capital” – a term Trump used in his speech – and Israel purposefully excludes it from its municipal boundaries.

In perhaps the starkest case of paradoxical logic, the plan suggests Palestinians could consider renaming Abu Dis with the Arabic phrase they use to describe Jerusalem, Al Quds, which means the Holy One, because of its religious sites. None of those religious sites is in Abu Dis.

Facebook Twitter Pinterest Yahya Ayad. Photograph: Oliver Holmes/The Guardian

At the town’s sleepy central roundabout, Yahya Ayad, 53, sells fruits and vegetables in a dark room. “Abu Dis will never be Jerusalem. Abu Dis is Abu Dis and Jerusalem is Jerusalem,” he said, a cigarette in his hand and his moustache stained yellow.

Ayad used to work as a guard for a mosque in Jerusalem’s Old City but his Israeli travel permit was not renewed. Now he can see the city from a hill but he cannot enter. “Ultimately they will get rid of us,” he said of the Israeli government. “Israel is the spoilt child of the Americans.”

Trump’s plan for Abu Dis, confirmed by the Israeli prime minister, Benjamin Netanyahu, resurrects a mid-90s idea to house the Palestinian parliament in the town. The suggestion was that it would operate during an interim period before a full peace deal was signed.

While the structure was mostly built, it was never opened, in part due to objections from Palestinians that this would signal Abu Dis as a future capital.

Facebook Twitter Pinterest The abandoned Palestinian parliament building in Abu Dis. Photograph: Ammar Awad/Reuters

Ahmed Abu Hilal, the town’s mayor, said Abu Dis still had no aspiration for greatness, and nor did he want a promotion to a city mayor. “We refuse that. Jerusalem is the capital of Palestine,” he said in front of a map of the town at his office.

Trump was implementing a plan that the Israeli government had envisioned for decades, he argued, one that isolates Palestinians into ever smaller enclaves while taking more land. The Israeli-built wall in the town had already cut families from each other and forced Abu Dis’s farmers to give up agriculture, he added.

Israeli leaders have been much more receptive to Trump’s plan, accepting it as the basis for talks and saying they will immediately move to start implementing some of their favourite parts, including annexing large sections of the Palestinian territories.

Facebook Twitter Pinterest Ahmed Abu Hilal in his office on Wednesday. Photograph: Oliver Holmes/The Guardian

Palestinian leaders, however, have denounced Trump. “[Y]our deal, the conspiracy, will not pass,” said the Palestinian president, Mahmoud Abbas.

In Gaza, the geographically disconnected Palestinian territory on the Mediterranean coast, an official from the militant Hamas group that runs the enclave said it would also never agree to the terms of the deal, which include a demand that the faction fully disarms. “They will not take [our weapons] away unless they destroy the Palestinian people,” Ismail Radwan told the Guardian.

Nearby, in Gaza’s streets, thousands of Palestinians came out on Wednesday to protest against the plan, burning tyres and blocking streets. But it was unclear what the demonstrations in central Gaza City would achieve. Residents there have been living under an Israeli-Egyptian blockade for more than a decade, and most have never left.