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DOHA (Reuters) - The Arab League on Tuesday approved a Qatari proposal to set up a $1 billion fund for Arab East Jerusalem, which Palestinians want as the capital of an independent state under any peace deal with Israel.
Arabs say that Israeli settlement-building on land captured in the 1967 Middle East war, including Arab East Jerusalem, has made a two-state solution backed by the United States unfeasible.
Qatar's emir, Sheikh Hamad bin Khalifa Al-Thani, said his country will contribute $250 million to the fund, which he called for in an opening speech to an Arab summit in Doha that focused on the crisis in Syria and stalled Israeli-Palestinian peace efforts.
"The summit... calls for setting up a fund to support Jerusalem to the value of $1 billion to finance projects and programmes that would maintain the Arab and Islamic character of the city and reinforce the steadfastness of its people," the draft resolution said.
The Islamic Development Bank, based in Saudi Arabia's Red Sea city of Jeddah, will manage the fund, it said.
Palestinian President Mahmoud Abbas welcomed the fund to help protect the Arab character of the city and urged Arab states to contribute to it.
"The Israeli occupation is working in a systematic and hurried way to Judaise East Jerusalem, change its features and uproot its Palestinian inhabitants, attacking the al-Aqsa Mosque and its Muslim and Christian holy sites," Abbas said in a speech at the summit.
Israeli Foreign Ministry spokesman Yigal Palmor said the initiative was "a badge of shame" for Qatar.
"Objecting to 'Judaisation of Jerusalem', so to speak, is absurd and is equatable to an objection to the Catholic nature of the Vatican or the Islamisation of Mecca, it is naturally unthinkable," Palmor said.
The fate of Jerusalem has proved one of the thorniest sticking points in past Middle East peace negotiations.
Arab leaders set up $1 billion Arab fund for Jerusalem | NDTV.com