Israel captured East Jerusalem, including the historic Old City with its Jewish, Muslim, Christian and Armenian quarters, and the West Bank from Jordan in the 1967 Middle East war.

It has since annexed East Jerusalem, and Netanyahu, of the hardline Likud party who took office in March, has vowed he will not re-divide the city.

The previous Israeli government of centrist premier Ehud Olmert made no secret of its continued construction in Jewish settlements in and around East Jerusalem. Unlike Netanyahu, Olmert however had called for handing over Arab neighbourhoods of the city to Palestinian sovereignty.