Seventeen days after the end of the Six-Day War in 1967, Israel redrew the boundaries of Jerusalem, annexing 70 km² to the city's area. The considerations that informed the new boundaries reflected the composition of the planning committee, which included military men and politicians:
- Control of the mountaintops surrounding West Jerusalem, from which the city was heavily shelled during the war
- Including maximum land with minimum Palestinian residents
- Including the Atarot airfield, out of the desire to maintain an international airport in the capital of Israel (the Atarot airfield never served as an international airport, and since the second intifada has not served as an airport at all).
The annexation substantially increased the municipal area of Jerusalem, which until 1967 was less than 40 km², making Jerusalem the biggest city in Israel. In addition to Jordanian Jerusalem, which included the Old City and another 6 km² around it, Israel annexed 28 Palestinian villages to the Jerusalem municipality. 70,000 Palestinians lived in the annexed territory in 1967, and found themselves under Israeli rule. Israel offered these residents citizenship, which was rejected collectively on the grounds that accepting Israeli citizenship would legitimize the annexation and obliterate the residents' Palestinian identity. Therefore, the residents of East Jerusalem received the status of permanent residents of Israel (for more information about the special status of the Palestinian residents, see here).
After the annexation of 1967, 70,000 Palestinians held blue identity cards; at the beginning of 2010 the number was estimated at 300,000. In 1967 they constituted 25% of the total population of the "united" Jerusalem, now they constitute more than 35%. At the current rate of growth, their share in the total population of the capital of Israel will be 40% by 2020, according to accepted projections.
Even though the Palestinian residents are entitled to vote in Jerusalem municipality elections, they boycott them for the same ideological reasons that led them to refuse Israeli citizenship (legitimizing the annexation and obliterating their Palestinian identity). This means that the Jerusalem municipality does not have a single elected official whose job is to take care of the Palestinian public. This is directly reflected in the allocation of city budgets; the Palestinian residents of the city, who constitute more than one third of the city's population, receive only 8-10% of the municipal budget.
Since the annexation, Israel has tried to "erase" awareness of the Green Line by promoting the construction of massive Israeli neighborhoods in East Jerusalem. Today, 200,000 Israelis live in those neighborhoods. Along with the Palestinian residents, most of the residents of Jerusalem live on its east side, beyond the Green Line.
From the perspective of Israeli law, the act of annexation changed the status of the land fundamentally and made it, legally and practically, an integral part of the sovereign state of Israel. This includes applying all of the laws of Israel to the annexed territory (as opposed to the rest of the West Bank, which continues to be considered territory "seized" by Israel). International law does not recognize the legitimacy of the annexation and continues to consider East Jerusalem an occupied area whose political future should be decided at the negotiating table.