Between 1948 and June of 1967, Jerusalem was divided in two: West Jerusalem, which covered an area of about 38 square kilometers was under Israeli control, and East Jerusalem , which contained an area of some 6 sq. km, was ruled by Jordan. In June 1967, following the 1967 War, Israel annexed some 70 sq. km to the municipal boundaries of West Jerusalem, and imposed Israeli law there. These annexed territories included not only the part of Jerusalem that had been under Jordanian rule, but also an additional 64 square kilometers, most of which had belonged to 28 villages in the West Bank, and part of which belonged to the municipalities of Bethlehem and Beit Jala. Following their annexation, the area of West Jerusalem tripled, and Jerusalem became the largest city in Israel.
Prior to 1967, therefore, most of the area comprising present-day Jerusalem was not part of the city (West or East), but rather part of the West Bank. The new borders, set by a committee headed by General Rehavam Ze'evi, then assistant to the head of the Operations Branch of the Israel Defense Forces' General Staff, were approved by Israel's government.
In setting the borders, the committee's objective was to strengthen Israeli sovereignty over the city by creating a Jewish majority. Thus, demographic considerations were decisive, and planning considerations were only of secondary importance. In order to ensure a significant Jewish majority, the primary consideration was to prevent the inclusion of heavily-populated Palestinian areas within Jerusalem. Whereas several Palestinian villages were placed outside the city, some of their lands were included within the city's new borders, examples being Beit Iksa and Beit Hanina in the north, and detached areas lying in the municipalities of Bethlehem and Beit Sahur in the south. Villages and neighborhoods were, therefore, divided; one part remained in the West Bank, and the other part was annexed by Israel.
After the annexation, Israel conducted a census in these areas and granted permanent residency status to residents in the annexed areas present at the time the census was taken. Persons not present in the city for whatever reason forever lost their right to reside in Jerusalem. Permanent residents are permitted, if they wish and meet certain conditions, to receive Israeli citizenship. These conditions include swearing allegiance to the State, proving that they are not citizens of any other country, and showing some knowledge of Hebrew. For political reasons, most of the residents do not request Israeli citizenship. . Setting the municipal boundary to run through neighborhoods and villages also created a distinction between Palestinians regarding their rights, since residents living in the unannexed area continued to be residents of the West Bank, and were subject to military rule.
Palestinians hold the status of "permanent resident" of the State of Israel. This is the same status granted to foreign citizens who have freely chosen to come to Israel and want to live there. Israel treats Palestinian residents of East Jerusalem as immigrants who live in their homes at the beneficence of the authorities and not by right. The authorities maintain this policy although these Palestinians were born in Jerusalem, lived in the city, and have no other home. Treating these Palestinians as foreigners who entered Israel is astonishing, since it was Israel that entered East Jerusalem in 1967.
Permanent residency differs substantially from citizenship. The primary right granted to permanent residents is to live and work in Israel without the necessity of special permits. Permanent residents are also entitled to social benefits provided by the National Insurance Institute and to health insurance. Permanent residents have the right to vote in local elections, but not in elections to Knesset [Parliament]. Unlike citizenship, permanent residency is only passed on to the holder's children where the holder meets certain conditions. A permanent resident with a non-resident spouse must submit, on behalf of the spouse, a request for family unification. Only citizens are granted the right to return to Israel at any time.