Tax incentives would also be part of the new pro-Jerusalem policy proposed by Prime Minister Ehud Olmert, the former mayor of the Israeli capital, said the Cabinet Secretariat in a statement to BosNewsLife.

Sunday’s cabinet meeting was held in Jerusalem at the Menachem Begin Heritage Foundation, named after the late prime minister who once said that Israel had an "advanced Basic Law : Jerusalem - Capital of Israel, which expresses Jerusalem’s special place for us as a state and a society."

The "reunification" mentioned by Olmert, refers to 1967 when following the Six-Day War, Israel captured East Jerusalem, asserted sovereignty over the entire city, and in 1980 declared Jerusalem, "complete and united", to be the capital of Israel.

EAST JERUSALEM

East Jerusalem however has been seen by Palestinian Arabs as a possible capital of a proposed Palestinian state. The status of the city and of its religious places remains disputed to this day, and Sunday’s announcement was expected to be closely monitored by Palestinian and Arabic leaders.

In comments obtained by BosNewsLife, Prime Minister Olmert on Sunday, May 13, said that he wanted to "advance and encourage Jerusalem" with the measures and a grant of 5.75 billion Israel New Shekels (about $1.5 billion) over five years.

Prime Minister’s Office Director-General Ra’anan Dinur told BosNewsLife that, "We want to assure the economic strength of the city. These measures will greatly assist in achieving this goal."

MOVING OFFICES

Among the most controversial measures was a plan to transfer "various government units to Jerusalem," including the cabinet consideration to "transfer government offices to Jerusalem," creating facts on the ground as a discussion on a peace plan with Palestinians is still continuing. Virtually all embassies have been set up outside Jerusalem, mainly in Tel Aviv, because of the controversy over Jerusalem. Only the International Christian Embassy, a Christian group supporting Israel, has set up its headquarters in Jerusalem, according to a list seen by BosNewsLife.

"According to the proposal, rental contracts for Government offices outside Jerusalem will not be renewed beyond 2015," the Cabinet Secretariat told BosNewsLife. It said "this decision will substantially influence the city’s growth and development by increasing employment and municipal revenues."

In addition the "construction of [the] first stage of [a] new courts complex in Jerusalem," was to be constructed beginning with the "the construction of a new Jerusalem Magistrates Court" in the city center.

"SIGNIFICANT STEP"

"This will be a significant step in a comprehensive program to allocate greater resources to the judicial system in order to assist it in dealing with an increased workload," as well as decreasing waiting times and "strengthening its image." Financing was expected from government and what officials described as "external sources," with elaborating.

The government will also support the establishment of a central school for Jerusalem studies at the Yad Ben-Zvi Institute in the city. "The institute will be a leading body regarding Jerusalem studies, will operate on the highest professional level and will offer coordination, guidance and assistance to all bodies dealing with the issue. The institute will produce educational materials and programs, encourage research and cooperate with other bodies in the field of Jerusalem studies," the Cabinet Secretariat added.

Tax cuts were to make it more attractive to live in Jerusalem, including a planned cancellation of the employer’s tax in Jerusalem imposed on salaries paid by non-profit organizations, including social welfare organizations, educational and cultural institutions, hospitals and local councils.