http://www.haaretz.com/hasen/spages/529510.html
The Sharon government implemented the Absentee Property Law in East Jerusalem last July, contrary to Israeli government policy, since Israeli law was extended to East Jerusalem after the Six Day War. The law means that thousands of Palestinians who live in the West Bank will lose ownership of their property in East Jerusalem.
Government officials estimate the assets total thousands of dunam, while other estimates say they could add up to half of all East Jerusalem property.
The government decision in July confirms a decision reached in the ministerial committee for Jerusalem affairs a month earlier. The decision was presented to the prime minister and attorney general and met with their approval, but the decision was not publicized until now and is not listed on the Web site of the Prime Minister's Office.
The Absentee Property Law of 1950 stipulates, among other things, that an absentee is someone who at the time of the War of Independence "was in any part of the land of Israel that is outside the area of Israel" - that is, the West Bank and Gaza Strip.
According to the law, absentee assets are transfered to the authority of the Custodian for Absentee Property, without the absentee being eligible for any compensation. When East Jerusalem came under Israeli law, then-attorney general Meir Shamgar directed that the law not be applied to West Bank residents who have property in the parts of East Jerusalem that became part of the State of Israel. Prime Minister Yitzhak Rabin reissued that directive in 1993.
With the recent construction of the fence in the Jerusalem region, Palestinian landholders from Bethlehem and Beit Jala requested permission to continue working their fields, which are within Jerusalem's municipal jurisdiction. The state's response stated that the lands "no longer belong to them, but have been handed over to the Custodian for Absentee Property." At stake are thousands of dunam of agricultural land on which the Palestinians grew olives and grapes throughout the years.
"These people's property was always considered absentee assets, but so long as no fence existed, these people could get to their property and everything was fine from their standpoint," said a senior judicial official involved in the case. "The fence is the result of terrorism. It's not fair that a man becomes an absentee because his tie to his land has been cut without his doing. But morality is one thing, and what is written in our laws another."
The Palestinian landholders and their Israeli lawyers term it a "land grab," and also worry that nascent Housing Ministry plans will build on part of absentees' land.