Israel Radio reported that the Obama administration has demanded an immediate halt to the construction of a Jewish housing project in an east Jerusalem neighborhood. The report said that Ambassador to the United States Michael Oren was summoned to the State Department and told that the project, which is being developed by an American citizen, must stop. Prime Minister Binyamin Netanyahu is at odds with the White House over the issue of building in post-1967 communities, but successive governments have held that land inside of Jerusalem's municipal boundaries does not fall within the discussion of other post-1967 lands. "I read the newspaper headlines today about the construction of a neighborhood in Jerusalem and I would like to reemphasize that the united Jerusalem is the capital of the Jewish people and of the State of Israel. Our sovereignty over it is cannot be challenged..." That is Netanyahu's response. But he is quite mistaken. Israel's declaration of sovereignty over east Jerusalem has never been accepted by the world. In fact, the international community has not even officially recognized west Jerusalem as the capital. Not one government has its embassy in Jerusalem today. Netanyahu's statement of our sovereignty in Jerusalem not being challenged is at best wishful thinking.\ JERUSALEM IS not a united, undivided city. It is, in fact, very divided. Jerusalem is almost two separate cities. Perhaps the division is not east and west - those old divides have been changed by 42 years of massive Israeli construction in what was once the part of Jerusalem controlled by Jordan. It is true that there is a Jewish majority, not only in west Jerusalem but also in what is called east Jerusalem. The divide in Jerusalem is clearly on national-ethnic lines - there is an Israeli Jerusalem and there is a Palestinian Jerusalem. The State of Israel officially controls both Jerusalems and claims sovereignty over both, but in reality, other than using its power to demolish Palestinian homes, collect municipal taxes and provide the most minimal municipal services, Palestinian Jerusalem is not part of Israel. The State of Israel can continue to use its power to build homes for Jews in Palestinian Jerusalem, but it is highly unlikely that Ras el-Amud will ever be Israeli, just as Gilo will never be Palestinian. Even after 42 years of control over east Jerusalem, Jerusalem remains one of the most segregated cities in the world. There are almost no integrated spaces in Jerusalem. Israelis and Palestinian live in separate areas. Oddly, the lack of planning for Palestinians in east Jerusalem has led to many Palestinians renting and even purchasing flats in some Israeli areas, such as Neveh Ya'acov and Pisgat Ze'ev. This is the law of unintended consequences at work. That law had the same results with the construction of the Jerusalem separation walls that have largely separated Palestinians from other Palestinians. For years the Israeli policy was aimed at creating conditions that would encourage Palestinian Jerusalemites to move outside of the municipal boundaries. Satellite towns such as A-Ram, Samiramis, and Daharit al-Barid in the north part of Jerusalem boomed with dense buildings providing large and relatively cheap apartments for thousands of Palestinians from Jerusalem. They could move freely between Ramallah and Jerusalem and, as east Jerusalem became increasingly cut off from the Palestinian Authority areas and as a result of the permit regime preventing Palestinians from entering Jerusalem, Ramallah increasingly became the business and political interim capital. With the construction of the walls around Jerusalem, however, tens of thousands of Palestinians moved back into Jerusalem. Some unofficial statistics suggest that there are now almost 300,000 Palestinians in east Jerusalem while the satellite towns in the north have been turned into ghost towns. ISRAEL'S LACK of real governance in the Palestinian parts of Jerusalem has created a huge slum with inner-city problems of poverty, crime, drugs, school delinquency, filth, untreated sewage and human despair. Ten minutes from the center of Israel's capital are parts of the city that look like the Third World. There is an immediate need for 1,700 classrooms to be built for Palestinian children. The rising crime rate has not increased a willingness of the police to address the need to provide protection to the citizens of east Jerusalem, even though that crime creeps across the divide into Jewish neighborhoods. There is a real void of governmental authority in Palestinian Jerusalem. Before the second intifada, Israel allowed the PA's Preventive Security Service to unofficially function there. Today there is no authority and the void is being filled by Hamas and Hizb al-Tahrir. Once again the law of unintended consequences at work. When Israel and the Palestinians signed the Declaration of Principles in September 1993, they agreed that the future of Jerusalem would be negotiated. When they signed the interim agreement two years later, they restated that they would negotiate the future of Jerusalem. In the Wye River agreement of October 1998, Netanyahu agreed not to take any unilateral action that would change the status of the territories to be negotiated. In the trilateral (US, Israeli, Palestinian) statement at the end of the Camp David summit in July 2000, the parties stated: "The two sides understand the importance of avoiding unilateral actions that prejudge the outcome of negotiations and that their differences will be resolved only by good-faith negotiations." The US backed road map from 2003 explicitly stated that Jerusalem was part of the deal that had to be negotiated: "final, permanent status resolution, including on borders, Jerusalem, refugees, settlements..." In November 2007 in the joint statement of the Annapolis conference, both sides agreed that "in furtherance of the goal of two states, Israel and Palestine, living side by side in peace and security, we agree to immediately launch good faith bilateral negotiations in order to conclude a peace treaty resolving all outstanding issues, including all core issues without exception, as specified in previous agreements." Netanyahu can declare from today till eternity that Jerusalem is the eternal undivided capital of Israel, but that will not make it so. Almost the entire world would like to recognize Jerusalem as Israel's capital, but that will not happen until they also recognize Jerusalem as the capital of the state of Palestine. Israel's sovereignty over all of Jerusalem is only unchallenged by the government of Israel, not by anyone else. The writer is the co-CEO of the Israel/Palestine Center for Research and Information (www.ipcri.org). He was also a member of prime minister Ehud Barak's expert committee on Jerusalem prior to the Taba negotiations of January 2001.