Wednesday's bulldozer rampage by an east Jerusalem Arab, which left three Israelis dead and scores wounded, reignited the complex debate over how exactly Israel should counter potential enemies from within. Husam Taysir Dwayat's lunchtime attack on one of the city's busiest streets - Jaffa Road - stood out as the second attack in a row that was carried out by an Arab resident of east Jerusalem, coming less than four months after another east Jerusalem Arab killed eight young students at the city's prestigious Mercaz Harav Yeshiva. The attacks revived fears among some Jewish residents that the city's 250,000 Arabs were serving as a fifth column, and renewed calls by some Israeli hawks for swift retaliatory action to be taken on east Jerusalem residents. Dovish politicians, meanwhile, said Wednesday's attack only served as further proof that these Arab neighborhoods and villages should not be part of Jerusalem. Although the vast majority of Arab residents of the city have remained on the sidelines of the violence over the past seven years, nearly all the major Palestinian terrorist attacks in the city have been carried out with the assistance of east Jerusalem Arab residents. In contrast to Palestinians from the West Bank, Arab residents carry Israeli ID cards that allow them freedom of movement throughout the city and the West Bank - rights that are often exploited by Palestinian terrorist groups. Jerusalem police chief Cmdr. Aharon Franco conceded Wednesday after the bulldozer attack that police have "no small difficulty" in dealing with the security threat posed by some Arab residents of the city due to their legal status, while Israel Police Insp.-Gen. Dudi Cohen spoke of having to deal with the "historic reality" going back hundreds of years of Jews and Arabs living together in Jerusalem. Yet some Israeli politicians and academics are becoming increasingly vocal in their criticism of Israel's handling of the Arab residents of the capital, who receive an an array of social services, including health care, unemployment compensation and social security benefits, from the state. "This is a nationalistic problem that is only going to get worse," said Professor Raphael Israeli of The Hebrew University of Jerusalem. "The government's attempts to keep (Arab residents) loyal to Israel by offering them perks is an absurdity that doesn't exist," he said. The reaction to the identity of Wednesday's perpetrators went beyond the largely expected demands - quickly supported by Prime Minister Ehud Olmert and Defense Minister Ehud Barak - to demolish the homes of terrorists living in east Jerusalem, and the police's decision to prevent the attacker's family from setting up a mourning tent outside their east Jerusalem home. In the most far-reaching proposal, Vice Premier Haim Ramon said Thursday that Israel should treat the two east Jerusalem neighborhoods where the attackers came from as Palestinian villages, and revoke the permanent residency status of their residents. "One of the main reasons that the attack was carried out yesterday with such ease was because there are Palestinian villages that for some reason are called Jerusalem - Jabel Mukaber and Sur Bahir. They need to be treated as we treat Ramallah, Bethlehem, Jenin and Nablus," Ramon said in an interview with Army Radio. "[Residents of these neighborhoods] must not have Israeli identification cards. How many more Israelis will have to pay with their lives until this is carried out?" The dovish politician from Olmert's ruling Kadima Party - who has repeatedly advocated dividing Jerusalem in the past - said that the fact that the two attackers hailed from Jerusalem only underscored that these areas should be on the Palestinian side of the security barrier. "If the separation fence were west of the two villages, which we all call Jerusalem, it would have been a lot harder to carry out these kinds of attacks," he said. Ramon's comments about the separation barrier are in keeping with the longstanding view of the Left that Arab neighborhoods of east Jerusalem should be on the Palestinian side of the barrier. The government's longstanding policy has been to include many of the east Jerusalem Arab neighborhoods on the Israeli side of the barrier so as not to divide the city. In a further sign of growing Israeli irritation with the role of east Jerusalem Arabs in terrorism after this week's attack, Welfare and Social Services Minister Isaac Herzog of Labor said that he planned to cancel all social benefits the state provides to the attacker's families, while a preliminary bill in the Knesset would strip citizenship benefits for anyone connected with terrorism. After the Mercaz Harav Yeshiva attack this spring, Public Security Minister Avi Dichter called for the expulsion to the West Bank of Arabs in east Jerusalem who have been involved in terrorist activity. "We need to find a legal and legitimate way to kick those few Palestinian Arabs in east Jerusalem who make it their choice to aid and take partin terrorism back to Ramallah," Dichter said. Any reaction, though, is likely to cause controversy. In the past, for example, Israel routinely demolished the homes of terrorists, but stopped carrying out the controversial practice, which was widely condemned by human rights groups and Palestinians as collective punishment, after an internal Israeli report concluded that the demolitions were largely ineffective. The east Jerusalem home of the terrorist in the March yeshiva attack was never demolished after legal appeals barred the move - infuriating rightists, who claimed that the decision "invited" this week's attack. "Whoever does not destroy the house of the terrorist who only four months ago murder eight yesiva students is in essence inviting further attacks by their hesitation," said MK Uri Ariel from the hawkish National Union Party. "Further evasion of fighting terrorism will only invite further attacks," he said. BEYOND THE political rhetoric, the repeated involvement in terrorism of Arab residents of east Jerusalem - albeit a minority - also underscored Israel's failure to integrate this segment of society into its much-touted "united capital," four decades after the reunification of the city in the 1967 Six Day War. Indeed, most of Jerusalem's Arab residents have both Israeli permanent residency and Jordanian passports, having turned down full Israeli citizenship due to their opposition to Israeli rule over the city. They have consistently boycotted municipal elections in the city, but turned out to vote for the Palestinian Legislative Council - even though polls have shown that the vast majority of Jerusalem Arabs would rather live under Israeli sovereignty than under the Palestinian Authority. (Interior Ministry spokeswoman Sabin Hadad declined Thursday to provide any numbers of Arab residents of the city seeking citizenship, but said Arab claims that "tens of thousands" had unsuccessfully sought citizenship were false.) Although Arab residents pay municipal taxes, decades of neglect and discrimination amid political uncertainty over the future of east Jerusalem have left Arab neighborhoods lagging far behind Jewish sections of the city. Despite attempts by the municipality, over the last decade, to narrow the gaps, they remain. The fact that Jerusalem Arabs are, by their own choosing, not represented in the Jerusalem Municipality, despite the fact that they make up one in three city residents only serves to exacerbate the problem. Some argue that whatever Israel will or will not do, the situation will remain difficult, and is likely to be volatile during any future times of tension. The Hebrew University professor opined that the public praise and ululation voiced by the attacker's aunt for his actions reflected the true feeling of most Arab residents of east Jerusalem. "We have to be honest with ourselves," Israeli concluded, "and admit that we cannot bring them aboard."