by the Associated Press

Arbitration between Jewish and Arab groups over the building of a museum promoting religious tolerance on the site of an old Muslim cemetery in Jerusalem has failed, officials said Monday.

The Los-Angeles based Simon Wiesenthal Center will petition Israel’s Supreme Court to begin construction of the Museum of Tolerance on the site in Jerusalem’s center after the seven-month arbitration failed, said the dean of the center, Rabbi Marvin Hier.

The matter has pitted the center, which is funded largely by American Jews, against two Arab groups over whether or not the $200 million museum should be built on the site of the cemetery in downtown Jerusalem.

Much of the dispute focuses on the history of the land.

The Arab groups say the plot was the site of a place of burial for prominent Muslims until Israel was established in 1948. The center says the land, where a parking lot four floors deep is located, has not been designated a Muslim cemetery for more than 30 years by the Israeli government or Jerusalem municipality, which gave the land to the center.

The center had offered to move the bones to a nearby, neglected Muslim cemetery and renovate it, Hier said, but the Arab groups were unwilling to compromise.

“We have been very patient and very responsible, and now we would like the Supreme Court to rule on the merits of the case as soon as possible,” Hier said.

Hier estimated that the nonprofit Wiesenthal Center, which fights anti-Semitism and promotes human rights, has lost close to $1 million in the delay and legal fees.

Durgham Saif, a lawyer for Karameh, one of the two Arab groups involved in the dispute, said in response that the well-known Palestinian families living in east Jerusalem who have relatives buried at the site did not want the bones removed.

“We think that if the Jerusalem municipality and the state of Israel are connected to this, they can find an alternative place,” Saif said. “If you want to build this museum here, you can’t call it a museum of tolerance.”

Israel’s Supreme Court does not have religious jurisdiction over such matters, Saif said. A 1964 opinion issued by the judge of an Islamic court that the area is no longer sanctified as a cemetery – often cited in the center’s arguments – has no weight, since the judge was acting without due process and was corrupt, Saif said.

The museum construction site was dedicated with great fanfare in 2004, with government officials and California Governor Arnold Schwarzenegger in attendance. The museum’s Web site says it wishes to “promote unity and respect among Jews and between people of all faiths.”

The plot of land is located not far from the line that divided the eastern and western parts of Jerusalem between 1948 and 1967, when Israel seized East Jerusalem from Jordan and declared the entire city its capital. Palestinians want East Jerusalem as the capital of a future state.