Israeli "segregation policies" have caused deep economic isolation and left more than 80 percent of Palestian children in east Jerusalem wallowing in poverty, the UN said in a report published Thursday.
"Palestinian poverty in Jerusalem has risen steadily over the last decade," the UN Conference on Trade and Development (UNCTAD) said in a statement.
A full 82 percent of Palestinian children in east Jerusalem lived in poverty in 2010, a figure that fell to 45 percent of Israeli children in the same area, according to the organisation.
The findings echoed a report issued by an Israeli human rights group earlier this week lamenting that the city's Palestinian residents were suffering the "worst (poverty) rate of all time."
The soaring poverty levels among Palestinians were closely linked to the city's increasing economic isolation, UNCTAD said, maintaining that "segregation policies" including the building of Israeli separation barrier had left it "integrated neither into the Palestinian economy nor into the Israeli economy."
Israel insists the barrier is needed for security reasons, but it has met broad international condemnation for carving off large segments of the West Bank, splitting families, separating farmers from their land and slicing east Jerusalem off from their hoped-for future state.
The barrier has caused direct losses to east Jerusalem's economy of more than $1.0 billion (760 million euros), the UNCTAD report said, adding that the wall continues to cost the city's economy around $200 million a year in lost trade and employment opportunities.
The report authors pointed out that isolation alone did not explain the spread of poverty among Palestinians in east Jerusalem, pointing to discriminatory policies and the different legal status of the city's Palestinian dwellers compared to Israeli settlers there and other Palestinians.
This "implies a host of further impediments, especially with regard to housing, employment, taxation," the report said, pointing out by way of example that Palestinians there "pay high municipal taxes in return for poor services and disproportionately low public expenditures."
UNCTAD chastised Israel for not doing enough to meet its obligations as an occupying power, urging the country to act "with vigour to improve economic conditions in east Jerusalem and the well-being of Palestinian residents."
It also called for an end to "settlement activities and the occupation of east Jerusalem in line with United Nations resolutions."
Jordan summons Israel envoy over Jerusalem mufti
Jordan on Wednesday summoned Israeli Ambassador Daniel Nevo after MPs unanimously demanded the government expel him following Israel's detention of the mufti of Jerusalem, state media reported.
Interior Minister Hussein Majali, who is acting foreign minister, summoned Nevo, the official news agency Petra reported.
"These Israeli actions violate international law and obstruct peace efforts. As occupying force, Israel is responsible for preventing such provocations. Jerusalem and Al-Aqsa are a red line," Majali said.
Majali asked Nevo "to convey this message to his government in a very clear way," Petra reported.
The development came after the lower house of parliament "unanimously demanded the government ask the Israeli ambassador to leave Jordan, and recall the Jordanian ambassador in Israel," Walid Obeidat, Petra said.
The non-binding vote came in response to "Israeli occupation measures at Al-Aqsa mosque" in the Old City, in the annexed eastern sector of Jerusalem.
Prime Minister Abdullah Nsur told MPs his government "views the Israeli violations in a very serious way."
Nsur added that the Jordanian embassy in Tel Aviv "will take all necessary measures to respond to these hideous crimes."
"If things develop, the government will ask the UN Security Council to hold an emergency meeting."
Israeli police questioned Hussein on Wednesday over a "disturbance" at Al-Aqsa mosque compound a day earlier, Israeli police spokesman Micky Rosenfeld said.
They released him six hours later without charge.
Mohammed Qudah, Jordan's Islamic affairs minister, said: "Israel has prevented worshippers from entering the mosque. It plans to build a bridge to link Al-Aqsa to some nearby settlements."
"Israeli excavations around the mosque have noticeably increased. Around 62 synagogues have been built around Al-Aqsa to form a circle around it," Petra quoted him as saying.
Qudah added that "the most dangerous development was when hundreds of settlers backed by the Israel army entered Al-Aqsa this morning."
"At the same time waqf (Islamic affairs) officials were prevented from going to their work, while materials needed for maintenance of the mosque were not allowed," he said.
The site, which sits just above the Western Wall plaza, houses both the Dome of the Rock and Al-Aqsa mosques. It is also venerated by Jews as the place where their two ancient temples once stood.
Some MPs demanded Jordan scrap its 1994 peace agreement with Israel, Petra said, but a statement by the parliament did not mention the treaty.
"The lower house of parliament condemns Israel's dangerous escalation. Its repercussions will impact the entire region and create a new cycle of violence, insecurity and instability," the MPs said in a statement.
In March, Palestinian president Mahmud Abbas signed a deal with Jordan's King Abdullah II, confirming a 1924 verbal agreement giving Amman custodianship over Muslim and Christian sites in Jerusalem.
US urges restraint
The United States on Wednesday called for Israelis and Palestinians to exercise restraint amid tensions over a "disturbance" at that Al-Aqsa mosque compound in Jerusalem.
"We're concerned about the recent tensions surrounding the Temple Mount, Haram al-Sharif, including the detention today of the Grand Mufti," State Department deputy spokesman Patrick Ventrell, told reporters.
"We understand that he was released," he said. "But we urge all sides to respect the status quo of this holy sight and to exercise restraint and refrain from provocative actions."
Israeli police are questioning a top Muslim cleric over a "disturbance" at the Al-Aqsa mosque compound, as Israelis celebrated Jerusalem Day.
The Mufti of Jerusalem, Mohammed Hussein, was taken from his home by detectives and taken to a police station "on suspicion of involvement in a disturbance," police spokesman Micky Rosenfeld said in Israel.
"Some chairs were thrown at a group of Jews on the Temple Mount," Rosenfeld said of the plaza which is known to Muslims as Al-Haram al-Sharif.
The site houses both the Dome of the Rock and Al-Aqsa mosques, and is also venerated by Jews as the place where their two ancient temples once stood, the last of which was destroyed by the Romans in 70 AD.
Hussein's detention comes as Israelis were celebrating Jerusalem Day which marks the "reunification" of the city after Israel captured the Arab eastern sector from Jordan during the 1967 Six Day War.
Israel later annexed east Jerusalem in a move never recognized by the international community.