Extract from an article in Issue 22, February 18, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. A new Jewish neighborhood in Jerusalem offers observant Jews luxury, comfort and proximity to the Old City - in the middle of a Palestinian village The real estate pitch sketches a "Next Year in Jerusalem" vision for the well-heeled: a gated community nestled in a bucolic hillside terrace overlooking a panorama of the Old City walls, the Dome of the Rock and the Mount of Olives. Nof Zion, a neighborhood of high-end condos geared to American Jewish buyers, promises a synagogue, a hotel, public gardens, a country club and a "harmonious residential neighborhood." What the promotional material glosses over is that Nof Zion - loosely translated as "Zion Panorama" - is located deep in Jabel Muqaber, an Arab neighborhood in East Jerusalem, near the Jewish neighborhood of East Talpiot. Just a few weeks after U.S. President George Bush promised to kick-start renewed Israeli-Palestinian negotiations, this newest Israeli neighborhood in Palestinian Jerusalem is slated to begin filling up. The developers of Nof Zion plan to distribute keys soon in the completed 91-unit Phase I of the project. Construction on Phase II, which includes another 100 units or so, is expected to start later this year, once the developers get building permits from the city. The overall project envisions 395 units, plus a luxury hotel. The demand for real estate - especially real estate that offers a coveted view of Jerusalem's Old City - is so high among religiously observant Diaspora Jews that it is providing the momentum for the project, despite the risks. Overall, the market for luxury real estate - especially in Jerusalem and Tel Aviv - has surged in the past two years as foreign investors snap up properties relatively cheaply, compared to the bloated markets in the U.S. and Europe. Price per square foot at Nof Zion has risen from $330 to $440 in a year - but this is still half the price of prestigious projects in the Western half of the city, where most Jews live. The company's marketing push is directed mainly at religious American Jews. Gita Galbut, head of U.S. marketing, says there's a "buzz" among her clients about the project, thanks to a marketing campaign targeting U.S. synagogues. A special push is aimed at New York City's Syrian Jewish community - chief Rabbi Eli Abadi visited the site this year - in the hope that they will purchase units en masse. She says that 60 percent of the first phase has been sold. Anticipating high demand from Orthodox buyers, apartments have been designed to accommodate large families - the smallest start at about 1291 square feet. Elevators that can be used on the Sabbath according to Jewish law are being installed, and there are plans for synagogues for both the Sephardi and Ashkenazi traditions. "It's exciting in Yerushalayim to have something that's gated and self-contained, with the best view," says Gita Galbut, head of U.S. marketing, using the Hebrew word for Jerusalem while speaking in English. "That's something unusual. I get at least eight phone calls a day" from potential buyers. Critics of the Nof Zion project say it hasn't gotten much attention from the media or the Palestinian Authority, possibly because it is not a government development project like the nearby Har Homa neighborhood, nor ostensibly driven by religious or nationalist ideology. The developers and marketers behind Nof Zion insist they have no political axe to grind. Instead of politics, the entrepreneurs behind Nof Zion, Digal Investments and Holdings Ltd., a real-estate developer traded on the Tel Aviv Stock Exchange, are presumably looking to make a profit. Denying a political agenda, Digal Chief Executive Dror Kaveh argues that objections to Nof Zion on the grounds that the project will prejudice the peace process are simply efforts to manufacture controversy. He asserts that the housing project is going up on property which has been owned by the family of Digal chairman Yehuda Levy for several generations and has withstood legal challenges. One local resident, Mohammed Eid, unsuccessfully challenged Digal's ownership in Israeli courts. Another group of residents who sought to challenge the municipality's planning approval reached an out of court settlement with the developers, according to Shlomo Lecker, a Jerusalem lawyer who has opposd the project. Hussein Abed Dat, a village resident, said he is challenging Israeli municipal claims that his house lies in expropriated land that has been included in the Nof Zion development. "The people of Jabel Mukaber look with envy and spite at the way that the government is treating the settlement on their land with privileges, such as a modern sewage system, lighting, roads, and all forms of civilized appearances, which our area is deprived of. They have not only taken our land, but they have brought restlessness into our life.'' "We have all the approvals. We are in Jerusalem, it's private Jewish land, and there is no dispute," Kaveh says. "We have no impact on politics." When asked about what she tells customers about the proximity of Nof Zion to Palestinian neighborhoods, Galbut says, "I tell everyone there is an Arab neighborhood around us.'' However, mention of Jabel Muqaber is conspicuously absent in the marketing material. "How can we, as Jews, not move into areas because we say that we are afraid? We have a responsibility" because the land will be claimed by Arabs if there is a vacuum, she then asserts. Extract from an article in Issue 22, February 18, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.