Facing a growing number of attacks in East Jerusalem, the Shin Bet security agency is recommending radical legislative changes which would allow the state to impose sanctions on the families of attackers.
In addition, security officials have claimed that the current route of the Jerusalem section of the security barrier is one of the causes of the terror escalation among residents of East Jerusalem, since it cuts them off from the capital and reinforces their connection with Palestinians in the West Bank.
Last week, a 19-year-old resident of the East Jerusalem neighbourhood of Jabel Mukhabar rammed his car into a group of soldiers near the Old City, wounding 17. The attack followed two bulldozer attacks in the space of two weeks in Jerusalem in July which killed three people.
According to the Shin Bet, since the beginning of the year, over 250 residents of East Jerusalem have been arrested on suspicion of terror, in comparison to 37 in 2007 and a mere nine in 2005. Since the beginning of the year, 13 Israelis have been killed in terror attacks in Jerusalem.
Most Arabs in East Jerusalem are not Israeli citizens but have the status of "permanent residents", allowing them to vote in municipal elections, enjoy social-security benefits and state healthcare. They carry blue Israeli identity cards which grant them the right to travel freely between the West Bank and Israel.
Security officials said that while it was impossible to stop lone attackers, it was possible to deter additional attacks in the future.
Following the most recent attack, Defence Minister Ehud Barak insisted: "Immediate action is required on the legal level to cut the time it takes to receive approval to demolish terrorists' homes. This will contribute to deterring potential terrorists."
Therefore, the Shin Bet is recommending that the government pass legislation which will allow the state to impose financial sanctions on families of terrorists and take away their social-security benefits.
The agency is also recommending demolishing the homes of terrorists, even though an IDF inquiry concluded several years ago that the policy was ineffective when used in the Palestinian territories.
"The barrier is partially responsible for the terror increase since villages like Shuafat and others are now cut off from Jerusalem and open to the West Bank," a senior security source explained. "This allows Palestinian terror elements from the West Bank to enter the village freely and influence the Arab residents."
In addition to Shuafat, other areas of East Jerusalem that are cut off by the security barrier include Abu Dis, Issiwayia and Azariyeh.
The Shin Bet says it has also noticed an increase in religious activity in East Jerusalem, which the agency claims is causing a "radicalisation" among local residents.
In addition, the lack of municipal and police activity in the neighbourhoods and villages has created a "vacuum" in governance in East Jerusalem which contributes to the rise in terrorist activity.