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Several weeks of rioting across Jerusalem have led to speculation that a new Palestinian intifada or uprising may be imminent.
The controversial settlement of Maale Zeitim in Ras El Amud, Jerusalem
At the heart of the current tension are efforts by Israelis to claim more Palestinian neighbourhoods for Jewish settlers.
We were the first foreign journalists allowed into the controversial settlement of Maale Zeitim in Ras El Amud for seven years.
Only religious Jews can buy here we were told.
Plans to move in hundreds of Jewish settlers here have been condemned by the US and Britain.
But Mr Peleg said they are going to carry on regardless.
"Why not? This is Israel, this is not London, this is not Washington. We are free independent residents in Israel. We do what we want to do," he said.
By the end of our tour it is clear the settlers are well advanced in making it impossible to redivide Jerusalem.
The Palestinians' dream of having their own capital in part of the city is looking increasingly unlikely.
That makes the chances of a two-state solution, and with it any hope of peace, equally remote, but Mr Peleg is unrepentant.
"If the Palestinians think that because east Jerusalem will not be the capital of Palestine so there will be no peace I can say that I'm very sorry that this is the attitude for the future of their children and their families," he said.
Israel Land Grab: Sky's Dominic Waghorn Gains Access To Maale Zeitim Jewish Settlement | World News | Sky News