Court to Allow Eviction of Jewish Group : Jerusalem: Appeals panel opens the way for ouster by overturning a lower court stay.

An appeals court opened the way Tuesday for the eviction of a nationalist Jewish group that had occupied a building owned by the Greek Orthodox Church, a move that ignited religious and ethnic unrest last week in Jerusalem’s historic Old City.

The three-judge district court overturned a lower court ruling that delayed an eviction request from the Greek church. Church officials were enraged by the sudden takeover of the building.

Late Tuesday night, a new move by lawyers for the Jewish group, the Ateret Cohanim yeshiva, for a stay of the appeals court order was rejected. In that hearing, the settlers were ordered to evacuate the building by this morning. The settlers said they would not resist police attempts to evict them.

“The judges have canceled the stay. They must be evicted,” said Avraham Sochozolsky, a lawyer for the church, after the appeals court decision.

Ateret Cohanim is dedicated to setting up Jewish enclaves throughout the walled Old City, which is divided into four traditional neighborhoods: Jewish, Muslim, Armenian and Christian. The group originally claimed that it had bought the Christian Quarter building outright. The sprawling, 72-room structure is a run-down, turn-of-the-century hotel called the Hospice of St. John.

Yeshiva spokesmen later said they were “guests” of a Panamanian-registered company that bought up a long-term lease and is running the building as a hotel. The seller, an Armenian Old City resident, has kept out of sight.

Last Thursday, a day after the Israelis moved in under armed escort, the Greek Orthodox patriarch, Diodorus I, led a protest march that broke up in chaos when police sprayed tear gas on the demonstrators. The commotion brought charges of carpetbagging and police abuse from Greek church officials. Members of the yeshiva, or seminary, denounced their opponents for “horrifying anti-Semitism.”

Israeli Religious Affairs Minister Zevulun Hammer visited the site Tuesday and appealed for calm. He took the view that the conflict is purely legal, hinging on who has the right to occupy the building, and should not be blown up into a religious battle.

“This is a civil problem, not one of religion,” Hammer said. “Every citizen of Jerusalem has the right to live wherever he buys property, according to the law.”

There has been much speculation about the origin of the money used to buy the lease -- reported to have cost anywhere from $3.5 million to $5 million. Ateret Cohanim member Shmulik Evyatar, who held a press conference at the building Monday, said the donors wished to remain anonymous “for obvious reasons.”

Israeli newspapers reported that the government has set aside funds to buy up Old City property outside the Jewish Quarter. Some of the money had been willed by deceased Israelis expressing the wish to enhance the city.

Sources in the Armenian Quarter said that officials from the Housing Ministry have been canvassing the neighborhood to look for willing sellers.

Despite efforts to confine the issue to law, the yeshiva’s selection of a site in the Christian Quarter touched several nerves.

Teddy Kollek, the city’s mayor, has criticized the occupation.

The Old City, which contains shrines holy to Islam, Judaism and Christianity, has long been bedeviled by campaigns of various faiths to muscle each other aside. For the past century, the city has been ruled by an informal agreement to freeze the disparate communities in place, a status quo that has been buffeted by war, civil conflict and population growth.

Israel annexed the eastern part of Jerusalem, including the Old City, after capturing it in the 1967 Middle East War, and restored the ravaged Jewish Quarter.