- Isawiyah now has a post office
- increasing number of East Jerusalem Palestinians are requesting Israeli ID cards
- more high school students are taking the Israeli matriculation exams (bagrut)
- greater numbers are enrolling in Israeli educational institutions
- decline in the birthrate
- more requests for building permits
- rising number of young people in East Jerusalem volunteering for national service (I didn't know there were any!)
- revolution in health care services - the Israeli HMOs are now very active in the eastern part of the city, which has drastically improved health care there
More Palestinian presence in west Jerusalem - in the malls, on the light rail, and in the Mamilla mall (I've noticed this since the mall opened, a few years ago - it creates a pedestrian link between the Old City and west Jerusalem).
The light rail has made it much easier to travel from east Jerusalem to the city center.
Thousands of homes in east Jerusalem have finally been hooked up to the Israeli water system (rather than the Palestinian).
More flexibility in issuing building permits (this is a huge deal, because Israel usually refuses to grant east Jerusalem Palestinians building permits, so people build illegally, and then the municipality tells them they have to tear down the building and issue demolition orders against them).
Now the Festival of Light, which takes place in the Old City in the late spring (it's one of the many cultural events that the city sponsors now that Nir Barkat is the mayor) has spread to all four quarters, and the local Palestinian merchants are starting to open their shops in the evenings to cater to the hundreds of thousands of people who come to the festival. This is something I noticed this year when I went to the festival.
Not all of the residents of east Jerusalem can participate in this process, because they are stranded outside the separation wall, basically in no-man's land. They're within the municipal boundaries so the PA can't do anything for them, and the city has basically abandoned them. They lack the most basic services (for example, garbage pickup, ambulances entering to take people to hospitals, schools), and it's very hard for them to get into Jerusalem for services. About 70,000 of east Jerusalem Palestinians are in this situation. The Israeli government deliberately built the separation wall to keep them on the wrong side.
Jewish settlement activity in east Jerusalem
This article talks about the "King's Garden" plan on the lower slopes of Silwan, which would create a tourist area by demolishing 22 homes of east Jerusalem Palestinians, who would be forced to move. This would be run by Elad, a ultranationalist Israeli group that runs the City of David site.
There's a lot of other settlement activity within Palestinian neighborhoods, including in Sheikh Jarrakh, elsewhere in Silwan, on the Mt. of Olives, and places I don't know about. (Ir Amim has information on settlement activity on their website, as does the Settlement Watch run by Peace Now).