Israel is quietly carrying out a $100 million, multiyear development plan in some of the most significant religious and national heritage sites just outside the walled Old City here as part of an effort to strengthen the status of Jerusalem as its capital.

The plan, parts of which have been outsourced to a private group that is simultaneously buying up Palestinian property for Jewish settlement in East Jerusalem, has drawn almost no public or international scrutiny. However, certain elements related to it — the threatened destruction of unauthorized Palestinian housing in the redevelopment areas, for example — have brought widespread condemnation.