For years, Jerusalemites have associated the Russian Compound, a cluster of Czarist-era buildings near Kikar Safra, with law and order. Indeed, among other institutions, the area houses a police headquarters, a detention center and a courthouse. But if a deal to return two Russian Church properties in the area in exchange for investment in the construction of a new government complex is completed, Jerusalem's city center will forever be changed. Three years ago, then-Russian president Vladimir V. Putin claimed the Sergei Building, whose premises are presently used by the Agriculture Ministry, the Nature and Parks Authority and the Society for the Protection of Nature in Israel, and the Duhovnia Russian Mission Building, which houses the Jerusalem Magistrate's Court, as property of the Russian Orthodox Church. Since then, Israel has been negotiating their return. For Moscow, the regaining of the buildings symbolizes the restoration of Russia's national prestige, and some say, a stake in the Middle East. Israel, meanwhile, is concerned over the precedent such claims may have on other church properties in the city. After a tour of the Russian Compound in November 2007, a high-ranking Russian delegation met with Prime Minister Ehud Olmert to discuss the church properties in question. Imperial Orthodox Palestine Society head Sergei Stepashin, then head of the Accounts Chamber of Russia, the federal audit agency, had passed a personal message from Putin to Olmert in which all the demands for the return of the Russian church properties were finalized. In January of this year, the parties exchanged notes regarding the juridical procedure. Then the Russian Embassy in Tel Aviv announced that "the property might be delivered to Russia by the end of June 2008 during a special ceremony in Jerusalem." Since then, Russian media sources have suggested that this ceremony might take place on July 12 and may be attended by Putin. Also highlighted by the media was the matter of compensating Israel for vacating the sites. The money, suggested Stepashin, should come from Russian oligarchs Roman Abramovich and Arkadi Gaydamak. But despite reports at the end of last November that the two had indeed agreed to fund the construction of a new Jerusalem courthouse, spokesmen for neither Abramovich nor Gaydamak would confirm. According to a high-ranking official at the Russian Ministry of Foreign Affairs, the Jerusalem deal is on hold because of obstinacy on the Israeli side. "The ball is in Israel's court," says Anastasia Fedorova, a spokesperson for the Russian Embassy, who confirmed that the original date of the hand-over was July 12. A meeting between the two sides is scheduled for next week. THE 68 dunams that constitute the Russian Compound were granted to the Russian Empire by the Ottoman Empire in 1860 as a result of the Crimean War of 1854-1856. That year, the Russian Consulate was erected, and around it several hospices, monasteries and churches were constructed to accommodate the influx of pilgrims. Backing the huge undertaking was the Imperial Orthodox Palestine Society, based in St. Petersburg. With the outbreak of World War I and the subsequent Russian Revolution in 1917, the flood of pilgrims ceased, Turkish soldiers occupied the Russian Compound and the Russian Orthodox Church split in two. The "Red Church" continued to operate in Russia under the auspices of the Communist regime, and the "White Church" of Russian emigres in the West established their own religious institutions. Toward the end of World War I, the British conquered Palestine from the Ottomans and established a security zone in the Russian Compound. British authorities recognized the White Church as the owner of Russian assets in the Holy Land, but in 1948, the nascent Jewish state reverted ownership to the Red Church. The Hashemite Kingdom of Jordan, however, continued to recognize the White Church and its ownership of assets in east Jerusalem. In 1964, Israel purchased most of the Russian Compound from the Red Church for $3.5 million. The transaction became known as the "Orange Deal" as Israel, short on funds, paid the sum in citrus fruit. Three years later, Israel conquered the West Bank and annexed east Jerusalem, but continued to recognize the White Church as the owner of assets there. At the same time, diplomatic relations between Israel and the USSR ceased, and the offices of the Imperial Orthodox Palestine Society in Sergei's Compound were evacuated. The status of Russian property ownership in the region changed once again in 1994, with the establishment of the Palestinian Authority. Then-PA chairman Yasser Arafat transferred several properties in the West Bank and the Gaza Strip from the White Church to the Red Church (including a property in Hebron in 1997). Despite the historical union between the two churches, disputes over properties in Jerusalem and elsewhere in Israel continue to this day. According to Dr. Ze'ev Khanin from Department of Political Science at Bar-Ilan University, it was this shaky union between the churches that allowed for the Sergei's Compound deal to progress. "Israel was always very careful to respect the property rights of different religious persuasions - the Muslim Wakfs, church properties, etc. In this regard, even after the break of ties with the USSR in 1967, these rights were observed meticulously when it came to Russian church and state property in Israel. The Russians returned a favor and maintained the status quo of the Israeli Embassy building on Big Ordinka Street in Moscow," says Khanin. "As for Sergei's Compound - Israel was never against giving back the property. The only thing is that none of those who claimed the right to it - the Russian state, the Russian Red Church and the Russian White Church - were the legitimate heirs," he explains. "At the time, the Grand Duke Sergei established a special fund, since according to Ottoman laws the property couldn't be owned by a foreign state. Therefore, only Sergei's closest heirs could really be entitled to the property but no one was interested [according to a Makor Rishon report on June 13, Sergei's closest heir is Prince Philip, Duke of Edinburgh]. "Now, after the long awaited reunion between the churches, there were no obstacles left and Israel could sign off on the deal with Russian government. And for Russians this is obviously a matter of prestige, a move full of symbolism as they are trying to regain their positions in the Middle East," says Khanin. "Restoring the Russian land in Jerusalem is very symbolic and recalls the might and grandeur of the Russian Empire." According to Khanin, there are more than enough reasons for this deal to happen here and now, especially since there is a very powerful lobby pushing for it. "The person who leads this lobby, 'the church lobby,' is none other than Sergei Kirienko, the powerful head of RosAtom - the Russian Atomic Energy Agency." ON JUNE 9, the Russian Accounts Chamber published the following announcement on its Web site: "The PNA [Palestinian National Authority] has passed to Russian authorities three land lots in Jericho during a special ceremony which took place at the premises of the Accounts Chamber of the Russian Federation in Moscow. The head of the Imperator Pravoslav Palestinian Society, Sergei Stepashin, assured that the restored property included three lots: a 12,000 sq.m. one and another two located in the area called al-Moskobiya [Moscow lands] in the city." The announcement has since been reprinted by hundreds of Russian Web sites and news agencies. Many of them mentioned that the restored property is just a drop in the sea of land that used to be owned by Russia and the Russian church in Palestine prior to 1917. At the end of April another report was published by a Russian news agency, announcing that during PA President Mahmoud Abbas's visit to Moscow, he decided to transfer to the Russian government land in Bethlehem in addition to 35,000 sq.m. worth of property on the Mount of Olives and in Jericho. As for what's in store for reinstated Russian properties, according to sources at the Imperial Orthodox Palestine Society in Moscow, Sergei's Compound, with its magnificent courtyard, will be turned again into a hospice for pilgrims. As for land and property in east Jerusalem, Jericho, Bethlehem and Ramallah, the plan is to create Russian cultural centers and Sunday schools, thus strengthening ties between Palestinians and Russia. THE PROGRESS on property disputes, both in Israel and the Palestinian Authority, has drawn mixed reactions. Andrei Vasiliev, a Russian Orthodox Christian Israeli, says that the Russian Christian community is generally satisfied with the deal for the return of the Sergei Building and the Duhovnia Russian Mission Building. Legitimate Russian property is being returned to Russian hands, he says. Nonetheless, Vasiliev points to some nuances that overshadow the joy. "Why must this deal be paid with oligarchs' [Gaydamak's and Abramovich's] money? Can't Russia or the Russian church afford to pay some compensation without them?" he asks. "Also, I'm not sure that the local Christians - newcomers from Russia and Arabs - will gain from it. Today we are linked to the Greek Patriarchy, which has nothing to do with the Russians, and the question is whether the Russian church will be able to fill the vacuum and take care of those who live in the Holy Land and not only pilgrims that come to visit it." Some worry that returning the two Russian Compound properties may establish a dangerous precedent. "Many offices and government buildings were established on lands that belong to either Greek or Italian churches or confiscated lands that were not settled upon. Does it mean that now we have to give back the Education Ministry or the residence of the prime minister?" says Pinhas Levi, a resident of Rehavia. Samir Masri, a resident of Semiramis in east Jerusalem, says Israel would be better off returning land to the Palestinians. "Israel is conscious about its diplomatic position in the world, that's why it is hurrying into an agreement with the Russians. But what about the houses of the Palestinian owners in west Jerusalem? When will Israel give them back?" More optimistic about the prospective property transfer was Stepashin, who was recently quoted by a Russian news agency as saying, "To have a Russian flag in the center of Jerusalem, in such close proximity to the Holy Sepulchre, is priceless." In a speech last month in Moscow, Stepashin said: "For us the Holy Land is not a geographical spot, it is also a part of Russian spirit and of Pravoslav entity. It is a cultural-spiritual dimension where every stone is sacred with historical events. Also, the Holy Land is a home to our churches, monasteries, hospices, hospitals and school for local residents. Today, our key mission is to restore the heritage of Russian Palestine - quite a complicated task in the complicated military and political reality of the Middle East." Kadima MK Marina Solodkin is also supportive of the forthcoming deal in Jerusalem, saying it would be considered by Russia as a trust-building step that would later be rewarded by similar steps by Moscow. "The land in Jerusalem is priceless, but the relationship with Russia is priceless too," she says. "Also, Israel had always respected the property rights of others - these buildings were built by Russians for the sake of Russians, visitors and pilgrims and the law requests from us to return this property to Russia."