Israel's Supreme Court Orders Negotiation Over Jerusalem Church Land Dispute

Israel's Supreme Court is poised to order the Jewish National Fund (JNF) to enter into a time-bound negotiation with an investor group led by Gary Barnett. The aim is to resolve a long-standing dispute over church lands in Jerusalem, which has affected city residents for over two decades. Justices Dafna Barak-Erez, Ofer Grosskopf, and Yechiel Kasher indicated their decision would be delivered in writing.

The impending negotiation with Barnett's group, organized as Jerusalem Lands 2022, will address the rights of hundreds of residents living on the land, as well as the future of open spaces and public institutions established there. The court's intervention compels the JNF to act after a prolonged period of inaction. The justices also criticized the Israel Land Authority (ILA) for its failure to address the issue, despite its legal responsibility for managing state lands, including those held by the JNF.

The court's discussion stemmed from a petition filed in July 2025 by approximately 200 sub-lessees. These residents hold sub-lease rights on lands formerly owned by the Greek Orthodox Church in Jerusalem's Rahavia and Talbiya neighborhoods. The petition concerns 520 dunams (approximately 128 acres) in central Jerusalem, which include about 900 apartments.

These plots were leased to the JNF for 99 years in 1951-1952 by the Greek Church. Buildings, hotels, and significant public institutions like the Khan Theater, the Great Synagogue, the Begin Heritage Center, parts of the Israel Museum, and the Israel Democracy Institute were subsequently constructed on these lands, with residents becoming sub-lessees of the JNF.

In 2016, the lands were sold by the Greek Orthodox Church to an investor group led by Noam Ben David. In 2023, this group sold the lands to Gary Barnett's investment group for NIS 750 million. Barnett thus became the landowner, while the JNF continues to lease the land under agreements set to expire between 2051 and 2052.

The value of apartments on these plots has dropped by about 30% recently due to fears that residents could be evicted upon the expiration of the lease agreements. The petitioners sought to compel the JNF and ILA to exercise options to extend the leases, which expire in 2051-2052, to secure residents' continued rights. They argued that the original agreements allow the JNF to extend the lease indefinitely for a nominal fee, and its inaction creates uncertainty and devalues their properties. They also requested an order preventing the JNF and ILA from waiving extension rights during negotiations with Barnett's group.

While Supreme Court justices typically avoid intervening in JNF's lease decisions, they are expected to order the JNF to negotiate with Barnett's group regarding lease extensions and associated payments to resolve the complex situation.