Israel has always taken confusing and contradictory positions when it comes to east Jerusalem. Although it annexed the once Jordanian-held half of the city in 1967, it never annexed (gave citizenship to or integrated) the people living there. Consecutive Israeli governments have all declared the city to be “reunified,” yet systematically neglected its neighborhoods’ infrastructure, housing development (“natural growth”), education system, social services and basic municipal services such as trash collection, sewage and policing. East Jerusalem is a territory that Israel doesn’t appear to actually want but vehemently refuses to relinquish.

When Prime Minister Binyamin Netanyahu’s government agreed to a 10-month settlement freeze throughout the West Bank, the prime minister refused to include east Jerusalem. When Defense Minister Ehud Barak said,“the Arab neighborhoods [of Jerusalem] in which close to a quarter million Palestinians live will be theirs,” late last year, Netanyahu immediately clarified that Barak’s statements “do not represent the views of the government.” To the Palestinian Authority, and the entire Palestinian people, east Jerusalem is the future capital of its future state. Breaking from the position taken by Israeli negotiators for years (yet keeping with his own), the Netanyahu government has never once acknowledged the Palestinian connection to Jerusalem – until now.

As a goodwill gesture to help restart peace talks, Netanyahu on Friday said he intends to give the Palestinian Authority a package of economic and security gifts, a package that contained one detail that slipped past most of the news editors in Israel. Buried in the series of measures meant to improve economic and security conditions in “Palestinian areas,” Netanyahu said he would allow infrastructure improvements and residential construction projects to move forward in east Jerusalem.

The proposal would be laudable if it were not linked to political and diplomatic efforts. If, as Israel claims, east Jerusalem is part of its “eternal capital,” its neighborhoods should look as developed and modern as west Jerusalem. But by only advancing quality of life programs in east Jerusalem as part of a package comprised of similar projects in the West Bank and Gaza Strip, Netanyahu has acknowledged that east Jerusalem is not a part of the modern state of Israel, but a “Palestinian area” (his words).

While the prime minister did not explicitly say he was willing to negotiate ceding east Jerusalem, he did include it in a goodwill package intended to benefit the Palestinian Authority. By doing so, Netanyahu bought into the linkage between east Jerusalem and a Palestinian state.

This does not represent a watershed moment for the status of Jerusalem in peace talks. It is, however, an indicator that the Israeli government recognizes the contradiction in its own positions regarding the Palestinian areas of the capital. If Israel truly intends to keep Jerusalem as its “undivided and eternal capital,” it would already be providing the same services to residents of all its neighborhoods irrespective of the peace process.

By linking quality of life measures for Palestinian Jerusalemites to the peace talks, Netanyahu is equating east Jerusalem’s status to that of Area C (areas of the West Bank under full Israeli control) and subtly saying that Jerusalem can in fact be negotiated with the Palestinian Authority. Unfortunately, such negotiations will never see the light of day under a government that considers providing basic municipal services to be a favor to Mahmoud Abbas.

This article first appeared at The Jerusalem Post.