Israeli contractors on Sunday began demolishing a historic building in occupied East Jerusalem to make way for a Jewish apartment complex, despite demands from the United States to halt the project, dpa reported.
After years of legal delays, witnesses said bulldozers on the plot in the Arab neighbourhood of Sheik Jarrah began tearing down the building, known as the Shepherd Hotel.
The property, which abuts the former home of the late Grand Mufti Haj Amin al-Husseini, was used as a hotel after the Jordanians annexed East Jerusalem in 1949. The home of the Mufti itself will not be destroyed as it is protected by law.
It was declared "absentee property" after Israel captured East Jerusalem in 1967, and was used for a while by the justice ministry, before becoming an Israeli border police base.
It has stood empty since the beginning of this decade, but was bought by US businessman Irving Moscowitz, a staunch supporter of Israeli settlements in the occupied territories, who turned it over to Ateret Cohanim, an extreme-right, non-profit organization which promotes Jewish settlement in East Jerusalem.
In July 2009, the Jerusalem municipality authorized its plan to build 20 homes on the site of the hotel.
US Secretary of State Hillary Rodham Clinton has demanded Israel halt the project in the heart of Arab East Jerusalem, which the Palestinians want as the capital of their future state.
Netanyahu responded by saying that Israel "cannot accept the idea that Jews will not have the right to live and purchase in all parts of Jerusalem."