Late last week, the Obama administration demanded that the Israeli government pull the plug on a planned housing development near the Sheikh Jarrah neighborhood of Jerusalem. The project, a 20-unit apartment complex, is indisputably legal. The property to be developed—a defunct hotel—was purchased in 1985, and the developer has obtained all the necessary municipal permits.

Why, then, does the administration want the development killed? Because Sheikh Jarrah is in a largely Arab section of Jerusalem, and the developers of the planned apartments are Jews. Think about that for a moment. Six months after Barack Obama became the first black man to move into the previously all-white residential facility at 1600 Pennsylvania Avenue in Washington, he is fighting to prevent integration in Jerusalem.

It is impossible to imagine the opposite scenario: The administration would never demand that Israel prevent Arabs from moving into a Jewish neighborhood. And the Obama Justice Department would unleash seven kinds of hell on anyone who tried to impose racial, ethnic, or religious redlining in an American city. In the 21st century, segregation is unthinkable — except, it seems, when it comes to housing Jews in Jerusalem.

It is not easy for Israel's government to refuse any demand from the United States, which is the Jewish state's foremost ally. To their credit, Israeli leaders spoke truth to power, and said no. "Jerusalem residents can purchase apartments anywhere in the city,'' Prime Minister Benjamin Netanyahu said on Sunday. "There is no ban on Arabs buying apartments in the west of the city, and there is no ban on Jews building or buying in the city's east. This is the policy of an open city.''

There was a time not so long ago when Jerusalem was anything but an open city. During Israel's War of Independence in 1948, the Jordanian Arab Legion invaded eastern Jerusalem, occupied the Old City, and expelled all its Jews—many from families that had lived in the city for centuries. "As they left,'' the historian Sir Martin Gilbert later wrote, "they could see columns of smoke rising from the quarter behind them. The Hadassah welfare station had been set on fire and . . . the looting and burning of Jewish property was in full swing.''

For the next 19 years, eastern Jerusalem was barred to Jews, brutally divided from the western part of the city with barbed-wire and military fortifications. Dozens of Jewish holy places, including synagogues hundreds of years old, were desecrated or destroyed. Jerusalem's most sacred Jewish shrine, the Western Wall, became a slum. It wasn't until 1967, after Jordan was routed in the Six-Day War, that Jerusalem was reunited under Israeli sovereignty and religious freedom restored to all. Israelis have vowed ever since that Jerusalem would never again be divided.

And not only Israelis. US policy, laid out in the Jerusalem Embassy Act of 1995, recognizes Jerusalem as "a united city administered by Israel'' and formally declares that "Jerusalem must remain an undivided city.''

As a presidential candidate, Obama said the same thing. To a 2008 candidate questionnaire that asked about "the likely final status of Jerusalem,'' Obama replied: "The United States cannot dictate the terms of a final status agreement . . . Jerusalem will remain Israel's capital, and no one should want or expect it to be re-divided.'' In a speech to the American Israel Public Affairs Council, he repeated the point: "Let me be clear . . . Jerusalem will remain the capital of Israel, and it must remain undivided.''

Palestinian irredentists* claim that eastern Jerusalem is historically Arab territory and should be the capital of a future Palestinian state. In reality, Jews always lived in eastern Jerusalem—it is the location of the Old City and its famous Jewish Quarter, after all, not to mention Hebrew University, which was founded in 1918. The apartment complex that Obama opposes is going up in what was once Shimon Hatzadik, a Jewish neighborhood established in 1891. Only from 1948 to 1967—during the Jordanian occupation—was the eastern part of Israel's capital "Arab territory.'' Palestinians have no more claim to sovereignty there than Russia does in formerly occupied eastern Berlin.

The great obstacle to Middle East peace is not that Jews insist on living among Arabs. It is that Arabs insist that Jews not live among them. If Obama doesn't grasp that, he has a lot to learn.

*Irredentist: One who advocates the recovery of territory culturally or historically related to one's nation but now subject to a foreign government.