Broader picture

While Barkat's plan may, at first glance, appear to be no different to planning issues the world over. But any moves in Jerusalem, particularly on its eastern side, are not only highly controversial but can lead, and indeed in the past have led, to bloodshed.

Silwan lies across the green line, in what the international community determines to be occupied territory, an area the Palestinians would like to see as the capital of their future state. However, in Israeli law, all sections of municipal Jerusalem are part and parcel of the capital of the Jewish state.

As a result, all building work carried out by Israel in the Arab-dominated east of the city is seen by the United States and elsewhere as "unilateral measures" that "create facts on the ground." The U.S. State Department dubs this type of action "unhelpful."

"What's amazing is that Netanyahu did the right thing," said Gershon Baskin, the joint CEO of the Israel-Palestine Center for Research and Information.

He argues that Barkat's idea was not necessarily bad and could have been of benefit to the people of Silwan, but the municipality was implementing it in the wrong manner.

"You have to do this in cooperation. You can't do this as a unilateral plan of the municipality," said Baskin.

American role

Netanyahu asked Barkat to agree to the delay for two main reasons, said Ira Sharkansky, a professor of political science at the Hebrew University of Jerusalem.

The Israeli prime minister saw the Arab reaction to the plan and did not want to create further tension at a time when sensitivities in Jerusalem are already running high, according to Sharkansky.

Last week Palestinians on the Temple Mount and elsewhere in the city clashed with Israeli police officers, after Netanyahu decides to add two West Bank shrines to a list of Israeli national heritage sites.

Secondly, Netanyahu already has his work cut out with the U.S. administration and does not need to add steam to that pressure cooker.

There are suggestions in Israel that it was Washington that put its foot down and told Netanyahu he could not go ahead with the project. "I am sure that (U.S. Secretary of State) Hillary ( Clinton) or someone from the president's office called Netanyahu and said 'don't do this,'" suggested Baskin.

U.S. President Barack Obama has repeatedly made clear his opposition to any Israeli building work in the occupied territories. Amongst other reasons, the Americans object because they are well aware that the Palestinians are refusing to return to the negotiating table until Israel implements a full construction freeze in the West Bank and East Jerusalem.

Washington's thinking seemed to be in Barkat's mind when he spoke with reporters to explain the delay. "We have to continue with a lot of care, with a lot of listening, but we have to also make sure that the plan is successful, because the alternatives are much, much worse," Barkat said.

While Baskin agrees that Netanyahu did the right thing regarding Silwan, he argues there will be no agreement on issues like this until there is a permanent peace deal between the Palestinians and Israelis.