Fayyad pledged to continue supporting Palestinian residents of East Jerusalem, an area Palestinians want the capital of their future independent state.
He slammed Israeli Prime Minister Benjamin Netanyahu during the visit. "Netanyahu defined these suburbs as suburbs of Jerusalem, the united capital. And we say, yes, these are suburbs, but suburbs of our occupied capital which will always be the capital of our independent state."
Fayyad clarified that there will be no peace and stability until the Palestinians could reach those areas.
The Palestinian prime minister added that the PA would continue investing in Jerusalem's suburbs.
"The desire for life and the Palestinian people's victory will eventually defeat the aggression of the occupation and the settlers' conduct. We are determined to continue our project in this area as well."
Fayyad planted an olive tree at the entrance to the school and visited the new wing's library and computer room funded by his government. A number of Western diplomats attended the ceremony.
The Israeli Public Security Ministry issued a clarification saying that the order issued on Monday only applied to Sheikh Jarrah, the Christian Quarter and Shu'fat. According to the ministry statement, Fayyad did not violate the order.
On Monday, Netanyahu instructed the Israeli security establishment on to prevent the PA from conducting ceremonies and organizing events anywhere within the limits of the Jerusalem Municipality.
Fayyad was scheduled to participate in a ceremony to open fifteen new schools in Dahiyat al-Salam neighborhood and other parts in East Jerusalem. Fayyad briefly addressed the residents, who gathered in a reception, by telephone.
Dahiyat Al-Bareed and Dahiyat Al-Salam are within the Jerusalem municipal limits but are on the Palestinian side of the separation fence.
The PA paid for a large road works project in that area several weeks ago, because residents' requests to the Jerusalem municipality had gone unheeded.
Control over Jerusalem, which Israel captured during the June 1967 War, has been seen as the most sensitive and thorniest issue of Israeli-Palestinian conflict. The Palestinians are seeking to set up a Palestinian state with East Jerusalem as its capital. But the Israel says the city is its eternal capital.
Israeli President Shimon Peres, who served as foreign minister at the time of the signing of the Oslo Accords in 1993, had dispatched a letter to his Norwegian counterpart, Johan Jorgen Holst, stating Israel's recognition of the importance of Palestinian institutions in the city and its commitment to protect them. The letter was appended to the Oslo II agreements.
But former Israeli Prime Minister Ariel Sharon ordered the closure of the PLO's institutions in East Jerusalem, chief among them Orient House, in 2001, following a suicide bombing of the Sbarro pizzeria in the city, where 15 Israelis were killed.
Since then, Israel has balked at requests to allow these institutions to resume functioning. Indeed, Israel has viewed the closure of these bodies as one of its significant achievements from the second intifada period.
Sharon's government stated that the PA's status in Jerusalem is a matter to be discussed as part of final status talks, not beforehand.
On March 2009, Israel prevented the cultural festivals in the city sponsored by the PA on the occasion of "Jerusalem Capital of Arab Culture 2009."
