East Jerusalem neighborhoods on the "other" side of the security fence are fast becoming Hamas hotbeds and more "problematic" security-wise than much of the West Bank, Shin Bet (Israel Security Agency) head Yuval Diskin told the cabinet on Sunday. Diskin's unsettling comments came during a security briefing to the cabinet in which he said that there has been a sharp upturn in terrorism in the first seven months of 2008, with some 30 terror-related deaths so far this year, as opposed to 13 in all of 2007. Half of the terrorist killings were carried out by east Jerusalem Arabs, the cabinet was told. Diskin told the cabinet that it was more difficult for the IDF and security forces to enter the Shuafat refugee camp in northern Jerusalem than the Jenin refugee camp. Likewise, he said, there was a marked increase of Hamas activity in the east Jerusalem neighborhoods of Abu Dis and Azariya (Bethany), which are outside the security fence. He also said the number of West Bank residents living illegally in those neighborhoods was on the rise, and these people were increasingly making their way into the capital. Diskin described one of the unintended consequences of the security fence in Jerusalem being that large numbers of east Jerusalem residents on the outside of the fence had moved inside it, and their homes were being moved into by West Bank residents. He said a dangerous security vacuum has developed in some of those neighborhoods, along with what he said was a "governmental vacuum," where the IDF does not operate, because it was technically part of Jerusalem, in which the police were not very active. Diskin said there had been an increase of Islamic extremism in these areas, and little law enforcement or deterrence. The result, Diskin was quoted as telling the cabinet, was a part of Israel that "seems like the West Bank, sometimes worse." He said that in light of the increase of terrorism, and the sensitivity of Jerusalem, additional means of deterrence needed to be created to keep terrorists from perpetrating attacks in the capital. In an apparent reference to calls to demolish the homes of the families of terrorists and deport them to the West Bank, Diskin said that the current level of deterrence was not working, and that other means needed to be considered to get the terrorists to think twice. Diskin said that the Shin Bet has identified a significant increase in "popular terrorism," meaning spontaneous acts of terror carried out by terrorists not affiliated with any organization. The Shin Bet head also said that there was a connection between the situation in the Gaza Strip and violence in Jerusalem, with the terrorist groups in Gaza desperately trying to "export" terrorist attacks to the West Bank and Jerusalem. According to Diskin, in addition to six terrorist attacks in Jerusalem since the beginning of the year - four of which ended in fatalities - 12 other planned attacks in the capital had been thwarted. "These numbers are an indication of a problem in east Jerusalem," Diskin said. Public Security Minister Avi Dichter, former head of the Shin Bet, called for house demolitions and deportations to the West Bank for east Jerusalem residents involved in terror. He also warned that east Jerusalem Arabs were working on heavier and more dangerous construction equipment in Jerusalem than the bulldozer that was used in last week's attack. Dichter noted that with the exception of the shooting of two border policemen in the Old City earlier this month, terrorists had tried to keep their attacks out of east Jerusalem and the Old City so as not to disturb the tourism industry and daily life in those areas. Defense Minister Ehud Barak said he was sorry that the home belonging to the family of the terrorist from Jebl Mukaber who carried out the Mercaz Harav shooting attack had not yet been destroyed. He recommended concentrating the authority to carry out such home demolitions in the hands of the police. When asked by Interior Minister Meir Sheetrit if family homes of terrorists should be destroyed even if the family members were not involved in the attack, Barak responded in the affirmative, saying this was an important deterrent, and that Israel had to use all sanctions in its power to stem the tide of attacks. "I don't know if this will be the position in a couple of years," he said."But right now, this is what needs to be done." Vice Premier Haim Ramon, however, said that what Israel needed to do was not more home demolitions, but rather rid itself of east Jerusalem's Arab neighborhoods and villages. This position, one Ramon has advocated in the past, was also backed by Environmental Protection Minister Gideon Ezra. "Whoever wants there to be a fence east of Sur Bahir is deciding that Jerusalem will live permanently with terror and murderers, terror that will come from the 175,000 Palestinians who have no attachment to Israel," said Ramon, in reference to the neighborhood where the terrorist who carried out the first bulldozer attack in Jerusalem lived. "It is in Israel's interest to rid itself of these neighborhoods and villages, that were never Jerusalem, and that endanger the Jewish and Zionist nature of the city."