Jewish settlers with assault rifles slung over their shoulders moved into two buildings in a crowded Arab neighborhood of Jerusalem on Wednesday, setting off clashes between Israeli troops and Arab residents.

Palestinians, who claim east Jerusalem (search) as the capital of a future state, said the incident showed Israel was more interested in expanding settlements than in making peace. The settlers said they want to re-establish a Jewish presence in the neighborhood.

Israel says it will never relinquish the sector of the city it captured from Jordan in the 1967 Mideast war (search). In recent years, hawkish Jewish groups, with the backing of hardline governments and foreign investors, have bought several properties in east Jerusalem to strengthen Israel's hold there.

At daybreak Wednesday, a group of ultra-Orthodox Jews (search) — assault rifles slung over their shoulders — lugged boxes, chairs, tables and potted plants into buildings in the Silwan neighborhood of east Jerusalem. A van packed with sofas and couches arrived, and settlers hauled a water tank onto the roof of one building and set up a generator.

Settlers said eight families are to move into the buildings — a seven-story apartment building and a smaller house — which investors bought for them. The Arab owner of the smaller house said his property was seized unlawfully.

Awad Rajbi said he owns the smaller home. He said he was living elsewhere as he renovated the house he bought six months ago.

"They took my home away by force, I bought this with my money," Rajbi said, as the scene unfolded in front of him.

Rajbi's brother, Akram, said they were looking for the man who sold the house. He said the man apparently first sold the house to Rajbi then later a second time to the settlers. He then flew to the United States late Tuesday, Akram said.

"Last night the settlers came. They say they have a contract. They say they bought this house," Akram Rajbi said.

After settlers moved into the two buildings Wednesday morning, clashes erupted in a narrow alley. Palestinian residents began throwing stones from rooftops.

Police and soldiers commandeered three nearby buildings, stationing themselves on rooftops and firing tear gas at the demonstrators. Troops also entered four other Palestinian homes, pulling young men out.

Police beat one Palestinian man with a baton and handcuffed six others, dragging them away. Screaming women were also dragged away.

Nine Palestinians were arrested for stone-throwing, and six police officers were hurt, police spokesman Shmulik Ben-Ruby said. At least three Palestinians were seen bleeding.

The settlers said they were members of the Committee for the Renewal of the Yemenite Village in Shiloah (search) — Shiloah is Hebrew for Silwan — and that their aim was to re-establish a Jewish presence in the neighborhood.

Daniel Luria, a spokesman for the committee, said a community of Jews from Yemen had been established in the area 122 years ago. In 1938, the last of the families were forced to leave during Arab riots, he said.

"Sixty-six years later we have returned Jewish families to the area with the idea of living side-by-side with the Arabs," Luria said, adding that three of the eight families are of Yemenite heritage so "it's really closing a circle."

He said the group had coordinated the move with police and decided to move at night so there would be "less antagonism." Luria said the purchase of the smaller house could go to court, as it appears the Arab owner sold it twice.

Sharon adviser Roan Gissin said the Jewish group had the right to live where it wanted in the city.

"There are no Jerusalem settlements ... all of Jerusalem is under Israeli sovereignty since 1967," he said. "It is not so-called occupied land."

Palestinian Cabinet Minister Saeb Erekat blamed Israel's government for supporting settlers.

"[The settlers] have taken the law into their own hands before; they are taking the law into their hands now with the assistance of the government," he said.

Early Wednesday, Israeli soldiers destroyed the Hazon David (search) settlement outpost — a tent and a shack used as a synagogue — near Hebron in the southern West Bank.

Several hours later, about 300 settlers trying to rebuild the outpost clashed with security forces. David Wilder, a settler spokesman, said a teenager was kicked in the head and was on his way to the hospital.

Under the "road map" peace plan, Israel is supposed to take down dozens of unauthorized outposts and Palestinians must dismantle violent groups.

However, the plan has stalled and Israeli Prime Minister Ariel Sharon has proposed unilaterally pulling out of the Gaza Strip and parts of the West Bank.

Sharon said Tuesday he would hold a binding referendum within his hardline Likud Party (search) on the plan.

A "no" vote, at a time when Sharon is also under investigation for alleged corruption, would leave him wounded politically, while a "yes" vote could be the final blow to Likud hard-liners who oppose territorial concessions.

A poll published Wednesday in the Yediot Ahronot newspaper showed 51 percent of Likud members support the plan, while 36 percent opposed it. The Dahaf Institute poll questioned 507 Likud members and had a 4.4 percent margin of error.

"I will bring these things to a democratic test," Sharon said of his plan.

Likud officials said the vote could take place in May, after Sharon returns from a trip to Washington, where he is scheduled to meet President Bush on April 14. Three U.S. envoys were to arrive Wednesday in Israel, seeking more information about the plan.

On Tuesday, the sponsors of the road map — United States, European Union, United Nations and Russia — met in Brussels to discuss reviving the proposal, diplomatic sources said. They expressed qualified support for Sharon's Gaza plan, as long as it leads to further pullbacks and is in keeping with the road map blueprint, the sources said.

The pullout would mark a reversal for Sharon, who has long been a driving force behind expanding Jewish settlement in the West Bank, Gaza and east Jerusalem.

In 1987, he moved into an apartment in the Muslim Quarter of Jerusalem's Old City, at a time when he served as a Cabinet minister. But he has rarely used it.

The group that moved into the Silwan neighborhood Wednesday said the two buildings were bought by private investors interested in reviving the Yemenite village and in buying homes near Jerusalem's most hotly disputed holy site, known to Jews as the Temple Mount (search) and to Muslims as the Al Aqsa Mosque (search) compound.

The move by the settlers is bound to infuriate Palestinians who demand east Jerusalem as the capital of a future state. It was unclear who had funded the move or whether the settlers had bought the building.

In other Palestinian neighborhoods of east Jerusalem, settlers have bought houses and set up small settlements, infuriating local residents and at times sparking clashes.

Ahmed Hamidat, a Palestinian who lives nearby, said the group arrived at 2 a.m.

"I was up all night. People [Palestinians] were living in the building and I don't know what happened to them. I had no idea they [the settlers] were going to come live here," Hamidat said.

Ben-Ruby, the police spokesman, said the Jewish group had a contract showing they bought the house in 2001.

"We have sent both sides to court, and the court will decide whom the house belongs to," he said.