An Israeli wrecking crew knocked down Shadi Hamdan's home in an Arab neighborhood of occupied Jerusalem in just a couple of hours, reducing the upholsterer's savings to a pile of gray rubble. The demolition of the home vividly illustrates the toughest issue facing negotiators in Israeli-Palestinian peace talks: occupied Beit-ul-Moqaddas.

Israel claims the house was illegally built, although Israel’s occupation and subsequent annexation of Arab Beit-ul-Moqaddas is what is considered illegal according to the international community.

Agreeing on how to divide the ancient city is on the table but has yet to be resolved in talks launched at a U.S.-hosted Mideast peace conference last November. The Palestinians want to establish a capital in east Beit-ul-Moqaddas, captured by Israel in the 1967 Mideast War. Israel claims the whole city but has signaled willingness to cede some Arab neighborhoods.

Israel’s policies in the past 40 years have caused great demographic changes to occupied city, now home to 476,000 Jews and 250,000 Palestinians.

Since 2004, Israel has leveled more than 300 Palestinian homes in Beit-ul-Moqaddas's Arab neighborhoods, citing a lack of building permits. However, critics say the permits are virtually impossible to obtain and consider the demolitions part of a decades-old policy to limit Palestinian population growth in city illegally occupied by Israel.

Rabbi Arik Ascherman of Rabbis for Human Rights, a group that fights home demolitions, says Israel is violating the human rights of the city's Palestinian residents by tearing down their homes.

"Were Israelis and Palestinians to have an equal chance to get a building permit … it wouldn't be a human rights issue," said Ascherman. "It's a human rights issue because it's intentional and purposeful housing discrimination."

Hamdan's case is especially harsh — his home was destroyed once before, though he lives in an outlying area, Anata, that is among those most likely to become part of a future Palestine in the event of a peace deal.

Already, Anata is cut off from the center of Beit-ul-Moqaddas by Israel's West Bank separation barrier, dubbed by its critics as the “Apartheid Wall”.

The single-story structure was first knocked down in 2005 but volunteers rebuilt it over two weeks last summer. Former Beit-ul-Moqaddas city council member Meir Margalit, one of Hamdan's supporters, said his group won't be deterred and plans to rebuild again.

On Wednesday, a crane-mounted jackhammer tore down Hamdan's home — two apartments on 1,560 square feet, one for him and one for his parents, 60-year-old Naziha and 70-year-old Hassan. The wrecking crew was guarded by Israeli police, and one Israeli activist was briefly detained for trying to block the demolition.

"I felt my heart would explode," Naziha Hamdan said of watching her house being wrecked. Hamdan, a 30-year-old bachelor, said he'd sleep at his workshop from now on, while his parents would move in with his brother. A small truck arrived to cart off the family's belongings, including a sofa, fridge and window frames.

Hamdan's lawyer, Sami Ershied, said the family applied repeatedly for permission to build on its land in Anata, but was always turned town on grounds that Anata doesn't have a master plan, and without one, permits cannot be issued.

Demolition orders are currently pending against several other Anata houses, he said.

Across Arab east Beit-ul-Moqaddas, thousands of Palestinian residents live in fear of demolition, said Margalit.

Israel tries to portray demolitions as a technical matter, an attempt that does not convince the rest of the word that does not recognize the Israel’s illegal control of Beit-ul-Moqaddas.