After the Six-Day War, the urban development of Jerusalem was designed to promote homogeneous ethnic neighborhoods, with buffers separating Arabs and Jews. The pattern grew more complicated as new neighborhoods for Israeli Jews were constructed in the area that prior to 1967 had been dominated by Arabs. By 1990 West Jerusalem was exclusively Jewish, and East Jerusalem had nearly equal populations of Arabs and Jews. The Old City continued to have a non-Israeli majority, but the Jewish Quarter was restored and repopulated, and it quickly became a focal point of tourist and cultural activity. Since the Israeli residential and business sectors outside the Old City have been the target of development support from the government, many new neighborhoods, modern structures, and services have been created.
Clear gaps exist between the development of Arab and Jewish areas.
Politically, the city continues to be disputed. Israel claims sovereignty over all of Jerusalem, but Palestinians claim at least the eastern half, including the Old City and all of its holy sites. The complex historical and religious significance of Jerusalem has led to widespread demands for a negotiated settlement of its future political status. Repartition of the city or shared Palestinian-Israeli rule are among the options. Due to the sensitivity and centrality of the question of Jerusalem, discussions concerning the future of the city were isolated from the main body of the Palestinian-Israeli peace negotiations that began in 1993.