This is really the fault of the Jordanians, who over-ran East Jerusalem in '48-'49 and subsequently engaged in ethnic cleansing of Jewish Jerusalemites (with no compensation, of course!)
Israel Matzav: Life Magazine pics of Arab army removing Jews in 1948 from Jerusalem
As per the Wiki article, this is the result of a property dispute where the tenants have refused to pay the rent:
"Jewish groups have sought to regain property in Sheikh Jarrah they say were once owned by Jews, including the Shepherd Hotel compound, the Mufti's Vineyard, the building of the el-Ma'amuniya school, the Simeon the Just/Shimon HaTzadik compound, and the Nahlat Shimon neighborhood. At the same time, according to Jerusalem Center for Public Affairs, foreign investors from Arab states, particularly the Persian Gulf, are actively seeking to purchase properties to further Palestinian interests.[15] Many offers have been made to families in the neighborhood to sell their property to Jewish and Saudi groups.[citation needed]
In 2001, Israeli settlers moved into a sealed section of the al-Kurd family's house and refused to leave, claiming the property was owned by Jews.[23] In 2008, the Jerusalem District Court ruled that the Shimon Hatzadik property belonged to the Sephardi Community Committee. The Arab families had protected tenant status as long as they paid rent but several families refused to pay, ending in their eviction. The al-Kurds were evicted in November 2008. Muhammad al-Kurd, the head of the family, died eleven days later. The court ruling was based on an Ottoman-era bill of sale whose authenticity was challenged in 2009 on the grounds that the building had only been rented to the Sephardi group.[24] Fawzieh al-Kurd continued to protest the eviction, moving into an encampment in East Jerusalem.[23][25]
Lawyers for the Jewish families argued that documents from the Ottoman Empire originally used to prove that a Jewish Sephardic organization had purchased the land in question in the 19th century are indeed valid, while Palestinian lawyers brought with them documents from Istanbul's Ottoman archives indicating that the Jewish organization that claims to own the land only rented it, and as such was not the rightful owner, the Kurd family claims that when they pressed the court to look at the new evidence, they were told "it's too late".[26] Moreover, the Palestinian families and their supporters maintained that Ottoman documents that Israel's Supreme Court had validated were in fact forgeries, and that the original ruling and therefore evictions relating to that ruling should be reversed.[27][28] The lawyer for the Israeli families emphasized that the land deeds were authentic, according to many Israeli courts[26] The Israeli court decision (resulting in the aforementioned evictions) stated that the document presented by the Palestinian families was a forgery, while the document of Jewish ownership was authentic.[29]
In August 2009, the court evicted the al-Hanoun and al-Ghawi families from two homes in Sheikh Jarrah and Jewish families moved in based on a Supreme Court ruling that the property was owned by Jews. The United Nations coordinator for the Middle East Peace Process, Robert H. Serry condemned the decision: "These actions heighten tensions and undermine international efforts to create conditions for fruitful negotiations to achieve peace."[30] The US State Department called it a violation of Israel's obligations under the Road map for peace.[31] Palestinian negotiator Saeb Erekat said "Tonight, while these new settlers from abroad will be accommodating themselves and their belongings in these Palestinian houses, 19 newly homeless children will have nowhere to sleep."[30] Yakir Segev of the Jerusalem municipal council responded: "This is a matter of the court. It is a civil dispute between Palestinian families and those of Israeli settlers, regarding who is the rightful owner of this property... Israeli law is the only law we are obliged to obey."[32]"
