by PETER HIRSCHBERG

Never mind one narrow tunnel. Rightwing groups, backed by wealthy U.S. donors, are buying up dozens of East Jerusalem homes, some of them meters away from the Temple Mount.

"IN 15 MINUTES, STARTING from here, a tour of the so called Muslim Quarter... really the renewed Jewish Quarter," bellows an enthusiastic young man standing to one side of the Western Wall Plaza, meters from the entrance to the tunnel that sparked the deadly Israeli-Palestinian gun battles in late September.

Inscribed on his blue-and-white cap are the words Ateret Kohanim - the name of the yeshivah in the Old City's Muslim Quarter where he studies. Ateret Kohanim is a center of the far-right movement whose messianic mission includes making East Jerusalem Jewish. The method: buying Arab homes and settling Jews there, especially the Muslim Quarter.

At the first tour stop - a spacious stone-building "reclaimed" from the Arabs by Ateret Kohanim, which began its real-estate drive in the early 1980s - a video spells out the movement's spin on the history of the Old City and its future plans. In the opening scene, a pious Jew builds his home in the "Kotel (Wall) Quarter" in the 1920s. An Arab appears, throws rocks, tries to hack him to death and finally evicts him. Now black-and-white gives way to color: It's modern Israel and the same dispossessed Jew miraculously and nonviolently is reclaiming his home.

In the finale, a panoramic view of an Arab neighborhood on the Mount of Olives is suddenly blotted out by rows of modern apartment blocks - for Jews. The same happens to Silwan on the edge of the Old City, and to Abu Dis, on Jerusalem's eastern border. "The video shows the sad history of how the Arabs took our property," says Barak, the Ateret Kohanim guide. "We have the property deeds to prove it. Now we want to bring Jews back."

While the video presentation may be simplistic, there's nothing amateurish in the way Ateret Kohanim goes about settling Jews in East Jerusalem, home to over 150,000 Arabs. With the aid of state funds and donations from religious American Jews, Ateret Kohanim and similar groups use secretive, sometimes legally questionable means to scoop up Arab homes.

Jews did live in East Jerusalem in prestate years, as did Arabs in the Western city. But after 1967, mayor Teddy Kollek and successive governments kept Arabs and Jews apart - even as they built Jewish neighborhoods in East Jerusalem - in an attempt to avoid tension.

That policy is rejected by Ateret Kohanim and its sister groups. Their activity was feverish under the Likud governments of the 1980s, slowed dramatically when Yitzhak Rabin won in 1992, and is now ready to flourish anew. The day after Benjamin Netanyahu's election victory, members of the Elad settlement organization, which focuses its efforts in Silwan, took over a home they had purchased there. In late September they moved into another. Only days earlier, on September 18, Ateret Kohanim sent hired security guards to take over an Arab building opposite the U.S. Consulate in East Jerusalem, producing documents showing it had purchased a majority share in the property.

Ateret Kohanim won't say how many more properties are earmarked for takeover. But it claims to have 100 families eager to move into the Muslim Quarter.

Only when it comes to the Temple Mount itself does the reclamation effort stop, in deference to the sanctity of a site its members believe cannot be touched until the Redemption. Instead, activity is confined to study: members learn the laws pertaining to Temple sacrifices, ready for the day when they are renewed.

Each property acquisition establishes a new Jewish beachhead in the Muslim Quarter - requiring a security presence, further buttressing the Jewish hold. The opening of the new Hasmonean tunnel exit fulfills a similar purpose, says a member of the Religious Affairs Ministry's Committee for the Care of Holy Places, who notes that Ateret Kohanim lobbied vociferously for the tunnel opening. "There's now a new police presence. Next, there'll be a kiosk for tourists, then a souvenir shop. This way you can conquer another piece of East Jerusalem."

That's "complete nonsense," counters Amnon Lorch, chairman of the board of the East Jerusalem Development Corporation (which completed the final section of the tunnel), who claims he supported the opening for pure tourism reasons. "How are Japanese, Australian and English tourists who come out of the tunnel going to Judaize the Via Dolorosa?"

Lobbying for the tunnel was handled by the Western Wall Heritage Foundation, another nonprofit organization that shares some backers and ideology with Ateret Kohanim. The government allowed the foundation to control the tunnel, and charge an entrance fee. It, in turn, ensured that politicians, generals and other public figures were given preview tours. "No Arab workers were used in the tunnel, and anyone considered unsympathetic was kept away," says a member of the Committee for the Care of Holy Places.

ATERET KOHANIM OFTEN FINDS properties for purchase with the help of local Arabs. The transaction is often conducted via a third party, and registered in the name of a straw company overseas. The deal done, Ateret Kohanim takes possession, with police help at times. If necessary, Arab inhabitants - sometimes tenants, sometimes joint owners unaware of the sale - are evicted. The battle then usually moves to court.

Another method is to produce proof that the owners of a house fled East Jerusalem, to have it declared "absentee property," and then get the state to turn it over to them. This gambit also often ends up in court.

The property drive would not be possible without massive funding - much of it from U.S. donors. Take, for instance, the takeover last month of the building opposite the American Consulate. The deeds reveal that on May 12, 1993, the home - purchased, rumors say, for anywhere between $600,000 and $5 million - was registered in the name of Irving Moskowitz and then transferred to Don Holdings Ltd., a company registered in the Virgin Islands.

Moskowitz, 69, a Miami millionaire, may well be Ateret Kohanim's most generous backer. The father of eight, a major backer too of Netanyahu and Jerusalem Mayor Ehud Olmert, he made his fortune building hospitals in Southern California. He now operates a Los Angelesarea bingo hall, with a healthy portion of the take earmarked for East Jerusalem properties. In 1994, his charitable foundation gave $576,000 to the American Friends of Ateret Kohanim.

Moskowitz's name also appears on the donors' plaque in the Hasmonean tunnel. When the Via Dolorosa exit was opened late on September 23, Moskowitz was one of a select band of VIPs on hand.

IF PRIVATE DONATIONS ARE important, state funds are crucial for Ateret Kohanim. In 1992, the Labor government set up a committee to investigate the state's role in funding East Jerusalem property acquisition. Headed by then-Justice Ministry director general Haim Klugman, the committee found that tens of millions of dollars in state funds - much of it from the Housing Ministry under Ariel Sharon, who himself owns a home in the Muslim Quarter - had been channeled to the movement and to other organizations for the purchase and renovation of Arab homes and to finance subsequent legal actions. In some instances, the report found state bodies colluded with Ateret Kohanim activists who had produced false affidavits to get Arab homes declared absentee property.

Jerusalem Deputy Mayor Shmuel Meir, a member of the National Religious Party and a champion of Ateret Kohanim, dismisses those findings, charging that the committee was bent on stopping construction in East Jerusalem. "It was unprofessional and an embarrassment to the State of Israel," he says. All the purchases, he insists, were conducted "according to the letter of the law."

Now Meir, along with Ateret Kohanim activists, is promoting a project far more ambitious than any incremental takeover. It's more along the lines of the Ateret Kohanim video - the construction of 10,000 Jewish homes in Arab neighborhoods like Ras alAmud and AlTur. The plan, says Meir, is "awaiting government approval."

Meanwhile, on the streets of the Muslim Quarter, Ateret Kohanim activists continue to wage their daily battle. Barak directs his group through the yard of an Arab home once owned by a Jew. An Arab woman, upset by the intrusion, shouts from her front door: "This is my home."

"Don't be worried, don't pay attention and keep walking," says Barak calmly, ignoring her. "This is Jewish property."