A dispute over the fate of an ancient Muslim cemetery in Jerusalem threatened Wednesday to ignite tensions in Holy City as workers removed skeletons from the site despite Muslim pleas for the work to end.

Israeli developers and archaeologists are removing the tombs to make room for the Los Angeles-based Simon Wiesenthal Center to build a multi-million-dollar Museum of Tolerance, dedicated in part to promoting understanding among different religions. Muslims are incensed.

Mufti Ikrema Sabri, the senior Islamic cleric in Jerusalem, on Wednesday demanded that the dig stop at the site which until 1948 served as the main Muslim cemetery in Jerusalem.

"There should be a complete cessation of work on the cemetery because it is sacred for the Muslims," Sabri told The Associated Press. The Waqf, the Muslim council in Jerusalem that Sabri oversees, was not consulted on the dig, he said. The cemetery was in use for 15 decades and friends of the Muslim Prophet Muhammad are buried there, Sabri said.

On Sunday, a Muslim court in Jerusalem ordered work at the site halted.

The developing company conducting the work, Moriah, said the court did not have jurisdiction over the dig. Work to remove the tombs was stopped for two days this week, but continued Wednesday, Moriah spokesman Itsho Gur said.

"There are tensions over this work," Gur said. "But as long as we don't get an official order from police or from a court, we won't stop the work."

Israel's Supreme Court is slated to rule later this month on a petition by Israeli Muslim groups to halt the tomb removals. It has refused to issue a temporary restraining order halting the dig.

Gur denied a report in the Israeli newspaper Haaretz on Wednesday that workers had damaged the bones that were removed. The bones are being turned over to Israeli religious authorities, Gur said, adding that the Israeli Antiquities Authority is overseeing the dig according to Israeli law.

A spokeswoman for the authority, Osnat Goaz, would not comment when asked if Muslim authorities were consulted about the dig. Construction on former Jewish, Christian and Muslim cemeteries goes on daily in Israel, after the proper removal of the tombs, Goaz said. The bones are then reburied, she said.

"Israel is more crowded with ancient artifacts than any other country in the world," Goaz said. "If we didn't build on former cemeteries, we would never build in Israel."