It was an historic decision. But aside from the administrative changes, the government failed to set out a clear set of goals and policies regarding the city's future.
Thirteen years later, the "Jerusalem Law" was voted in with much fanfare, proclaiming that "Jerusalem, complete and united, is the capital of Israel." This caused a diplomatic furor, including the departure of the remaining handful of embassies from the city, but little else. The law is no more than a declaration, containing no details on how to secure the capital's viability.
Now, 27 more years have passed. And, as on every Jerusalem Day, while there will be no shortage of rhetoric on the 40th anniversary of the city's liberation, we are still waiting for a comprehensive blueprint offering a vision for Jerusalem.
What kind of a Jerusalem do we want? Are we willing to pay the price for our dreams? The politicians pay constant lip service to our sovereignty over the entire city, but successive governments have accepted the diplomatic status quo whereby not even our closest allies recognize this.
Why has the Foreign Ministry never embarked on a campaign to boost recognition of our capital? Perhaps no one thinks it's worthwhile expending diplomatic capital for such a lost cause?
We are repeatedly told that young people are fleeing Jerusalem and that it is the poorest city in the country. So why are the plans to attract businesses and young couples piecemeal at best?
Mayor Uri Lupolianski this year reminded us bluntly of the demographic threat by making the spurious assertion that there is a danger Hamas will control the city in 12 years. But has any administration ever said what the preferable proportion of Arabs in Jerusalem should be? And why is everybody tiptoeing around the real demographic question looming over Jerusalem's future?
At the current rate, the Jews might be a minority in the city by the end of the 21st century, but it's impossible to predict that far. What's clear right now is that there is a non-Zionist majority in the capital of Israel, consisting of the Palestinian and haredi communities.
Lupolianski, himself haredi, said a few months ago during a visit to a haredi school that "we are going to be the majority." He would not say that to the media, much less explain how the municipal apparatus would continue functioning when the only groups that are growing and being encouraged to stay are the low-income-to-poverty-level Arabs and haredi Jews. Perhaps he's banking on handouts from the state coffers.
The national government has also continually evaded responsibility. The plans to "strengthen" Jerusalem look good on paper, but none of them, even if implemented, address the city's core problems or help determine its identity. If Jerusalem has been lost to Zionism and nothing can be done about it, then perhaps the fact should be acknowledged.
Giving up on the Jewish people's holiest city might seem like an act of post-Zionism. Yet there are many who would argue that Tel Aviv, already the indisputable commercial and cultural center, is a more fitting choice as a capital for so vital and dynamic endeavor as the Zionist state.
This is nonsense, of course. Jerusalem embodies the Jewish nation's vital link to the past, without which there is no Israel and no Zionism. But that need not condemn the city to be stuck in the past. An impoverished border town cannot sustain a nation's capital, especially if the majority of its inhabitants don't identify with the state.
We have so many expectations from Jerusalem, but no city in the world could carry such a burden on its own. We want it to be a capital, a symbol for three religions, a holy city, a cultural beacon and a high-tech hub. This is too much, too heavy a weight.
So is there any hope for Jerusalem?
Two books published recently try to tackle this question. 
