JERUSALEM (AFP) - Israel's supreme court was holding a hearing on Monday (Aug 2) on the case of Palestinian families facing expulsion by Israeli settlers in annexed east Jerusalem, an issue that sparked conflict in May.

Dozens of people protested outside the court in Jerusalem in support of the Palestinians from the city's Sheikh Jarrah neighbourhood and against "Israeli settlement", an AFP reporter said.

Violent clashes in May over the possible Sheikh Jarrah evictions spread to Jerusalem's Al-Aqsa mosque compound, sparking a crackdown by Israeli security forces.

That triggered an 11-day war between Israel and Palestinian militants in the Gaza Strip, which ended in a tense ceasefire.

Four Palestinian families in Sheikh Jarrah have requested that the Supreme Court hear an appeal on their case, after the magistrate and district courts both ruled their homes belong to Jewish settlers.

The Israeli court system normally allows only one appeal after a ruling.

Since the Palestinians had already appealed the magistrate court ruling, the Supreme Court must decide whether to make an exception in this case.

"The court could enable us to appeal," Mr Sami Irshaid, the lawyer representing the families, told AFP.

Mr Irshaid said it was "unlikely" that a verdict will be reached on Monday.

Two lower courts had ruled that, under Israeli property law, the homes in question belonged to Jewish owners, who purchased the plots prior to the 1948 war that led to the creation of Israel.

In 1956, when east Jerusalem was under Jordanian control, Amman leased plots of land to families in Sheikh Jarrah, and the UN agency for Palestinian refugees built homes for them.

Amman promised to register them in their name, but never gave them full property rights.

But in 1967, Israel occupied east Jerusalem, then annexed it in a move never recognised by the international community.

In 1970, Israel enacted a law under which Jews could reclaim land in east Jerusalem they lost in 1948, even if Palestinians by then already lived on it.

No such option exists for Palestinians who lost homes or land.

Israeli anti-settlement group Ir Amim says that over 1,000 Palestinians are at risk of losing their homes to Jewish settler groups and individuals in Sheikh Jarrah and the neighbouring Silwan neighbourhood.