Israel yesterday steadfastly rejected a demand by several Arab leaders to cancel its plans for a "Greater Jerusalem", saying the scheme had no political implications.
"Jerusalem is the capital of Israel and we will not agree to freeze its development while awaiting accords" with the Palestinians, said Mr David Bar-Illan, the spokesman for the Israeli Prime Minister, Mr Benjamin Netanyahu.
At a mini-summit in Cairo earlier in the day, President Hosni Mubarak of Egypt, King Hussein of Jordan and the Palestinian President, Mr Yasser Arafat, urged Israel to give up its expansion plans for Jerusalem "immediately".
Israel triggered widespread condemnation last month when it approved plans to annex to Jerusalem several townships to the west, boosting its Jewish population by another 30,000, and to create a "super-municipality" for the city embracing Jewish settlements in the West Bank.
"The leaders stressed their total rejection of the scheme to judaise Jerusalem and demanded the Israeli government scrap this project immediately," the Egyptian Foreign Minister, Mr Amr Mussa, said, quoting a joint statement after the summit.
But Mr Bar-Illan said the Jerusalem plan was of a "municipal nature, without any political implications" and said the allegation that Israel was trying to judaise the city could be construed as anti-Jewish.
He also criticised the "threats to use force made each time there is a difference" between Israel and the Palestinians.
However, Palestinians fear that the Greater Jerusalem plan represents a step by Israel towards further annexation of their land and to create faits accomplis even before so-called final status talks to determine the future of Jerusalem have got under way.
At a joint news conference with Mr Arafat and King Hussein after the Cairo summit, Mr Mubarak warned Israel against "playing with fire".
"Playing with the Jerusalem issue is playing with a fire that has not been extinguished because Jerusalem does not interest the Muslim world only but the Christian and Jewish worlds as well," Mr Mubarak said.
Mr Arafat and King Hussein warned that any geographic or demographic changes to the city, holy to Jews, Muslims and Christians alike, would be perilous.
"Jerusalem is the most important and most dangerous issue and imposes on us all, not only as Palestinians or Arabs . . . to confront what is happening and stop any changes," King Hussein said.
"This situation threatens to lose the chance to achieve a just and comprehensive peace in the region and threatens to return to a cycle of violence," Mr Mussa said.
The three leaders also backed a Franco-Egyptian initiative to convene an international conference of supporters of peace to help revive the process.
Mr Mubarak said Arafat informed him of plans by King Hassan II of Morocco to convene an Islamic conference on Jerusalem "to discuss taking what action is deemed necessary".
"We are working to have a big Arab summit," Mr Arafat said in Gaza City on his return from Cairo.
On Saturday, the Palestinian Authority called on members of the UN Security Council to "assume their responsibilities" and condemn Israel over the Jerusalem plan.
Israeli diplomats at the UN now fear the Security Council will debate a full-blown draft resolution on the subject rather than the simple declaration they had expected would be discussed, Israel army radio reported.