It could be billed as the world's best minds tackle one of the world's biggest problems: A global competition to redesign Jerusalem in a way that fosters peace between Israelis and Palestinians.

The Massachusetts Institute of Technology will take entries from across the globe for a "Just Jerusalem" contest starting on March 31, hoping its winning entries can help resolve the Israeli-Palestinian conflict and spur regional peace.

It poses lofty questions that have bedeviled politicians for decades such as what Jerusalem, which is at the core of the Israeli-Palestinian conflict, needs to do to become "just, peaceful, and sustainable" by 2050, and whether the city should be a capital of both Israel and Palestine or of one state.

The ideas should "reconcile long-standing and seemingly intractable conflicts", among other criteria, MIT said.

Winners of four categories on the rebuilding of Jerusalem - from updating its physical buildings and other infrastructure to overhauling its economy, civil infrastructure and "symbolic infrastructure" - and a fifth "floating" category will receive a fellowship at MIT worth $50,000 each.

"There is a kind of nested set of conflicts that start at a small locality like Jerusalem and work up through the nation-state level of the Israeli and Palestinian conflict," said Diane Davis, co-director of the project and associate dean of MIT's School of Architecture and Planning.

Israel captured Arab East Jerusalem from Jordan with the rest of the West Bank in 1967 and annexed it, declaring it part of what it calls its "united and eternal capital". The world does not recognise the annexation, while Palestinians want East Jerusalem as the capital of a future state.

Underscoring tensions that are always close to the surface in the city, a recent Israeli archaeological dig near a compound housing al-Aqsa mosque, Islam's third holiest shrine, sparked off protests in East Jerusalem and across the Muslim world.

Israel rejects Muslim fears that the excavations, 50 metres from the religious complex known to Muslims as al-Haram al-Sharif and to Jews as Temple Mount, will damage al-Aqsa.

"The goal of the Just Jerusalem competition is to generate new approaches to and potential solutions for the many complex, seemingly intractable problems that the residents of Jerusalem face on a daily basis," MIT said.

Ms Davis said a big question will be how to deal with the barrier Israel is building in the occupied West Bank and in parts of East Jerusalem.

Israel says the project stops Palestinian suicide bombers from reaching its cities. Palestinians call it a land grab that could deny them a viable state and the International Court of Justice says constructing the barrier on occupied territory is illegal.

The nine-member jury includes a former deputy mayor of Jerusalem and a Palestinian scholar. The contest is open to anyone and the deadline for submissions is December 31. A winner will be announced in March next year.

Those who register for the contest can access "massive amounts of data and maps" compiled by "Jerusalem 2050", a project of MIT's Centre for International Studies and its Urban Studies department, Ms Davis said.

Winners would spend their time at MIT working together on how their combined ideas could be implemented.

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