Residents in East Jerusalem’s Arab Silwan neighbourhood said that Jewish settlers had moved into two buildings in the area, expanding a Jewish settler project in defiance of US criticism.

Many Israelis believe the area is important because they say it stands on the site where King David established his kingdom.

It is coveted by Israeli settlers who refer to much of the village as “The City of David”.

Far-right Jews have been paying top dollar for Silwan properties, often through Arab middle-men to circumvent Palestinian taboos on such sales.

Around 500 settlers live in Silwan, armed or protected by paramilitary police, among 50,000 Palestinians.

This is settler colonisation,” said Nabil Shaath, advisor to Palestinian President Mahmoud Abbas. “That is, once an Israeli buys a territory in the West Bank, it becomes a military zone that the Israeli government protects or controls, and it becomes part of the negotiations with the Israelis about the future territory of the Palestinian state.”

Ateret Cohanim, a right-wing Israeli organisation which works to settle Jewish people in East Jerusalem, said it facilitated buying the two buildings from their Arab owners.

“The concern of the Jewish people is that we’re living in the state of Israel in a united capital where Jews and Arabs live together and Jews have the right to live everywhere and anywhere, in any neighbourhood, especially in an old Jewish neighbourhood,” explained Ateret Cohanim spokesman Daniel Lurie.

Palestinians said the move is an effort to cement a Jewish presence in the neighbourhood which is driving out locals.