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This publication deals with Islamic activity and Islamic institutions in East Jerusalem under Jordanian and Israeli rule from 1948 until after the peace accords between Israel, the PLO and Jordan. After the Israeli takeover of East Jerusalem in 1967 Islamic institutions remained Jordanian organs. This study elaborates on the strategy adopted by the Palestinians of establishing a local Palestinian Supreme Muslim Authority serving as a political body to handle Palestinian religious and national debate for the future of Jerusalem. One of the features of this debate is the Jordanian - Palestinian - Israeli competence over the holy places in Jerusalem.;The ""waqf"" (pious endowments) institution, which is in decline in many Muslim countries, has been revived under Israeli rule. The economic resources of the waqf have been mobilized for the political struggle and it serves as a means of preserving the Islamic character of East Jerusalem and of strengthening the Muslim Arab population's attachment to Islamic institutions. This study focuses on the role of the ""Shari'a"" (Islamic law) Courts in various mechanisms which were developed to facilitate the adaptation of the traditional Islamic institutions to modern conditions.