Palestinians are angered by an Israeli plan to raze 22 Arab homes to make way for an archaeological park, and Palestinian president Mahmud Abbas has urged Washington to block the controversial project.
The park, which is planned for a crumbling Arab neighbourhood just outside the walls of the Old City, was approved by Jerusalem city council in June in a move that drew criticism both at home and abroad.
Washington has warned that it "undermines trust" and could hinder the indirect negotiations between Israel and the Palestinians that started in May.
Gan Hamelech, the Hebrew name for the area outside the Old City, is known as Al-Bustan to its mostly Arab residents.
Under the plan, 22 homes would be razed, while another 66 would be legalised. The 88 homes all had been slated for demolition because they were built without Israeli permits.
Al-Bustan is part of the so-called Holy Basin and is believed to be the site of ancient Jerusalem during the time of the biblical kings David and Solomon.
It is now a crowded Arab neighbourhood in a part of the city seized by Israel in the 1967 Middle East war and annexed in a move not recognised internationally.
Israel considers the whole of Jerusalem as its "eternal and indivisible" capital while the Palestinians see east Jerusalem as the capital of their promised state.
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