US President Donald Trump's decision to recognize Jerusalem as the capital of Israel, and to order the US embassy to move from Tel Aviv to the holy city, has upended decades of US policy and drawn international condemnation from allies and foes alike.

DW examines the competing ideological and religious claims, and the demographic dilemmas and power grabs in the holy city.

Competing claims

Jerusalem was split between an Israeli-controlled western sector and a Jordanian-controlled east following the Arab-Israeli war in 1948. Israel captured the West Bank and East Jerusalem in the 1967 Six-Day War. It later annexed East Jerusalem. 

Read more: The 1967 Six-Day War and its difficult legacy

East Jerusalem, which includes the Old City, is under Israeli law, unlike the Occupied West Bank, which is under military orders.

In 1980, Israel's parliament, the Knesset, declared Jerusalem to be Israel's "eternal and indivisible capital." The Knesset, the prime minister's residence, the Supreme Court and other government ministries are based in Jerusalem.

The international community and the UN do not recognize Jerusalem as the capital of Israel or the annexation of East Jerusalem. No country has an embassy in Jerusalem.

Israel bases its claims on historical and religious grounds, arguing that Jerusalem was the biblical capital of the Jewish people 3,000 years ago and has remained so ever since. It also cites the de facto situation on the ground. No country — except now the United States — recognizes Jerusalem as Israel's capital.

Palestinians claim East Jerusalem as the capital of a future independent state, basing the claim on historical, religious and demographic factors.

The international community and UN agree that Jerusalem should be one of the final status issues addressed in stalled peace negotiations for a two-state solution between Israelis and Palestinians.

Holy sites, ideology

Jerusalem's Old City concentrates holy sites central to Christian, Islamic and Judaic belief and practice into an area of less than one square kilometer (one-third of a square mile).

A center of contention is what is known to Jews as the Temple Mount, and to Muslims as the Haram al-Sharif (Noble Sanctuary).

For the world's 1.7 billion Muslims, it is the third holiest site after Mecca and Medina. For Palestinians, it is also a symbol of their struggle for a state.

The Temple Mount is Judaism's holiest site, but it remains under the administration of the Islamic Waqf (endowment) and custodianship of Jordan. It is located above the Western Wall, part of an old temple and the holiest site where Jews can pray.

Read more: What is Jerusalem's Temple Mount/Haram al-Sharif? 

For Christians, the Church of the Holy Sepulchre in the Old City is built on the site where most believe Jesus was crucified and buried.

However, Jerusalem holds special meaning for US evangelical Christians, who account for about 25 percent of the US population, according to the PEW Research Center. Evangelicals form a key support base for Trump and conservative US politicians. 

Most evangelical Christians believe that according to the Bible's messianic prophecies, Jews must be supported, and therefore Israel's control of Jerusalem. Some believe this will set the stage for the Second Coming of Christ.

Changing demographics

When Israel annexed East Jerusalem, it expanded the municipality by 72 square kilometers, incorporated 28 Palestinian villages and carved a border to meet demographic objectives.

Chief among its objectives was "to leave out densely-populated Palestinian areas in order to ensure a Jewish majority in Jerusalem," according to the Israeli human rights group B'Tselem.  

In 2015, Jerusalem's population was about 850,000 residents, of which 63 percent were Jews and 37 percent Palestinians, according to Israel's statistics bureau.

West Jerusalem is predominantly Jewish, as was the case before 1967. However, East Jerusalem has a majority of 370,000 Palestinians compared to 280,000 Israelis.

Since 1967, Israel has promoted the movement of more than 200,000 Israelis to settlements, or what the Israeli government calls neighborhoods, on the outskirts of East Jerusalem. The settlements are illegal under international law. 

In addition, more than 2,000 Jewish settlers live in the heart of Arab neighborhoods in East Jerusalem, in some cases forcing residents from their homes. In all, nearly one-third of land in East Jerusalem has been confiscated for Jewish settlements, according to the UN.  

Meanwhile, Israeli authorities have restricted zoning and building permits for Palestinians, whose population has increased fivefold since 1967. Although Palestinians make up 37 percent of Jerusalem's population, only 14 percent of land in East Jerusalem and 8.5 percent of land in Jerusalem municipality as a whole has been approved for Palestinian residential use, according to the Association for Civil Rights in Israel. 

Those who build without a permit — estimated by the UN to affect 90,000 residents — face the risk that their homes will be demolished. Since 2012, Israeli authorities have torn down some 600 Palestinian homes for lacking a permit, according to Human Rights Watch.

Palestinians in East Jerusalem are stateless. Israeli authorities issue residency permits that give Palestinian Jerusalemites the right to work, live there and receive benefits. They can vote in municipal elections but not in national elections. 

Two-tiered system?

Israeli authorities have revoked nearly 15,000 residency permits since 1967, according to the Association for Civil Rights in Israel, something Human Rights Watch has deemed illegal "forcible transfer."

According to the Israeli government, the residency permits are only lost if a person is outside of East Jerusalem — even if in the West Bank — for more than seven years.  This "center of life" policy has been criticized by the Association for Civil Rights in Israel, "as it only affects Arab residents, proving it is discriminatory in nature."

Those suspected or convicted of attacking Israelis, as well as their family members, have also had residency permits revoked. The homes of attackers' family members have also been demolished.

Israel says the policy is necessary as a deterrent. 

“Let it be known to all who are considering carrying out an attack that their families will pay a heavy price for their actions and the consequences will be severe and far-reaching," Interior Minister Arie Deri said in January 2017.

The United Nations says such "collective punishment" is a violation of international humanitarian law and that residency revocation may be a violation of the Fourth Geneva Convention prohibiting forcible transfers. 

Permanent residents can apply for Israeli citizenship, but since 2003 only 15,000 have applied and Israel has accepted fewer than 6,000 applications. 

Heightening the sense of separation, in the early 2000s Israel started building a Separation Barrier, or concrete wall, that cuts off East Jerusalem from the West Bank and even divides neighborhoods or reduces access to the city.

Around 140,000 residents live in Jerusalem neighborhoods separated from the city by the wall, according the Association for Civil Rights in Israel, with several thousand more living in "various convoluted enclaves."

Although Palestinian Jerusalemites pay taxes, service provision is unequal compared to their Jewish counterparts.

According to the Israeli rights organization Ir Amim, only about 10 percent of the municipal budget is spent on Palestinian neighborhoods although they make up 37 percent of the population. 

This has resulted in gross differences in education, health, recreation, infrastructure and other services between Jewish and Palestinian neighborhoods. 

Nearly three-quarters of East Jerusalem's residents live under the poverty line, compared to a poverty rate of 21 percent in Israel, according to the National Insurance Institute.

Despite Israeli claims to treat Jerusalem as a unified city, Human Rights Watch has accused Israel of running a two-tiered system in the city with "one set of rules for Jews and another for Palestinians."