The celebrations opened with a fireworks spectacular that painted a cloudless Middle Eastern sky with a feast of color while thousands of spectators gaped and cheered. Jerusalem was wishing itself a happy 3,000th birthday last week--an anniversary that will be underscored over the next 17 months with historical and religious exhibits, plays, concerts, dance recitals and conventions. But most of the detonations surrounding the ancient city's third millennium bash were on the ground: Jerusalem 3000, as the $7 million jamboree is known, has stirred up a dust storm of protest, mostly by Arabs who view it as a not-so-subtle stratagem to tighten Israel's hold on a city that is sacred to Muslims and Christians as well as Jews.

The controversy has stolen much of the fun from the party, beginning with the opening gala, which was snubbed by the ambassadors from all but 17 of the 70 nations invited, including the U.S. The European Union not only is boycotting the festival but has withdrawn subsidies for some annual cultural events that this year are being included under the Jerusalem 3000 umbrella. And the Arabs are so furious at the celebration--marking the biblical King David's conquest of the city for Judaism in approximately 1000 B.C.--that some analysts are worried it might impede the peace process. It raises the explosive issue of the political status of the Holy City at a time when negotiations between the Israelis and Palestinians over autonomy for the West Bank are at a delicate pass.

None of this fazes Israel's political leaders, who since the state's founding in 1948 have considered Jerusalem their eternal capital. Those leaders have reiterated that claim even more forcefully since Israel captured the Arab-dominated eastern part of the city from Jordan in the 1967 Six-Day War. "United Jerusalem is ours. Jerusalem forever!" shouted Prime Minister Yitzhak Rabin in the Knesset, just prior to last week's fireworks display. Earlier, Rabin made the same declaration in a tenser setting, while dedicating a new archaeological site at the so-called City of David, which is adjacent to the Arab town of Silwan on the outskirts of Jerusalem. There he and his entourage were guarded by hundreds of heavily armed Israeli border police. Arab villagers watched silently from the hilltops, then staged something of a counterdemonstration, releasing balloons in the Palestinian colors of green, red, black and white and waving Palestinian flags.

The government's Jerusalem 3000 spokeswoman, Gura Berger, was nonchalant about the diplomatic absences. "No one was forced to participate," she said. But Jerusalem Mayor Ehud Olmert, a leading figure of the right-wing Likud bloc, made no effort to conceal his annoyance, particularly at the absence of U.S. ambassador Martin Indyk. "Jerusalem is like an open wound in the relations between us and the U.S.," Olmert said. For his part, Indyk, who sent his cultural attache to the ceremonies, denied there was a U.S. boycott and said he would participate in other Jerusalem 3000 events.

Still, the political overtones were obvious, and with Israeli and Arab emotions running high, the Europeans and Americans were reluctant to be drawn into an avoidable dispute. The E.U. declared the celebration "one-sided" and sent a delegation of envoys to protest. "We don't want to commit ourselves to this event because we do not want to prejudge the final results of the peace talks as to the status of the city of Jerusalem," said E.U. spokesman Joao Vale de Almeida in Brussels. Talks on that "final status" are scheduled to begin in May 1996, though few expect Israel to cede a single square centimeter of territory, or the Palestinians to modify their claims.

Arabs consider the very premise of the celebration an affront, since it assumes that the history of Jerusalem began with King David. "Jerusalem was here long before King David, and Jerusalem will continue to be an Arab city in spite of all Israeli efforts," promises Ibrahim Dakkak, who heads a Palestinian development firm. Adds Adnan Husseini, head of the Wakf, which administers the city's Muslim religious sites: "Jerusalem has been an Arab city for 5,000 years, and it has been an Islamic city for 14 centuries."

Mayor Olmert responded to Husseini's assertion with an insult. "No one feels strongly about anyone who lived during the 2,000 years before King David came here," he said. "The people who lived here then are not part of my culture."

Lost in the acrimony is the fascinating history of a city whose origins archaeologists have traced back to 3,000 B.C. In a history so turbulent as to make current disputes seem inconsequential, Jerusalem has been leveled by invasion 37 times and ruled by a dizzying succession of tribes and nations, including the Egyptians, Canaanites, Persians, Greeks, Romans, Christian Crusaders, Turks and British. Jerusalem remains today an unresolved political problem. From 1948 to 1967 the city was divided by barbed wire, with Jews and Arabs on opposite sides. After winning the 1967 war, Israel took control of a reunited Jerusalem.

Today 155,000 of the city's 560,000 residents are Arabs, most of whom choose to take no part in the city's administration, and coldly ignored Israeli invitations to get involved in Jerusalem 3000. The Grand Mufti of Jerusalem, Sheik Ekrema Sabri, called for protests throughout the Arab world against the Israeli celebration, which is said to be just the latest effort "to Judaize the city and wipe out the Arab presence."

It is not only Arabs and foreigners who find the stridently political tone of the celebrations distasteful. Teddy Kollek, Jerusalem's renowned mayor from 1965 to '94 who first proposed the festival in '93, is disappointed by the outcome. Had he remained mayor--he was defeated by Olmert in 1994 elections--he would have geared the celebration, Kollek says, "to strengthen[ing] Jerusalem as the capital by focusing on the history and centrality of the city to the three monotheistic religions"--Judaism, Christianity and Islam. But, as others have noted, the Jerusalem 3000 brochures barely mention the city's Islamic and Christian traditions and institutions. "The whole thing has been too politicized to my taste," says Kollek.

The pageant's organizers offer no apologies. Says Yaakov Levy, deputy director general of the Foreign Ministry and the Rabin government's man in charge of the festivities: "Jerusalem is central to Israel and Judaism, and it has been so throughout the millennia." Moreover, Levy declares the festival--which this week will feature a nightlong concert of King David's psalms in the open-air theater at Mount Scopus--to be an unqualified international success. "And if the controversy were absent," he adds, "we'd be even more pleased."

Unfortunately, the controversy is likely to escalate as the festival proceeds through the 17 months of scheduled activities, including a huge pageant next month featuring thousands of dancers and musicians marching through the Holy City's streets. When the festivities build to a crescendo, so will Arab anger, and all involved hope the high emotions do not trigger a tragedy.

--Reported by Jamil Hamad and Robert Slater/Jerusalem