information:highlighting, structural:summarization
Economy

Historically, Jerusalem's economy was supported almost exclusively by religious pilgrims, as it was far from the major ports of Jaffa and Gaza. Jerusalem's religious and cultural landmarks today remain the top draw for foreign visitors, with the majority of tourists visiting the Western Wall and the Old City. In 2010, Jerusalem was named the top leisure travel city in Africa and the Middle East by Travel + Leisure magazine. in 2013, 75% of the 3.5 million tourists to Israel visited Jerusalem.

Since the establishment of the State of Israel, the national government has remained a major player in Jerusalem's economy. The government, centred in Jerusalem, generates a large number of jobs, and offers subsidies and incentives for new business initiatives and start-ups. Although Tel Aviv remains Israel's financial centre, a growing number of high tech companies are moving to Jerusalem, providing 12,000 jobs in 2006. Northern Jerusalem's Har Hotzvim industrial park and the Jerusalem Technology Park in south Jerusalem are home to large Research and Development centres of international tech companies, among them Intel, Cisco Systems, Teva Pharmaceutical Industries, IBM, Mobileye, Johnson & Johnson, Medtronic and more. In April 2015, Time Magazine picked Jerusalem as one of the five emerging tech hubs in the world, proclaiming that "The city has become a flourishing centre for biomed, cleantech, Internet/mobile startups, accelerators, investors and supporting service providers."

Higher than average percentages are employed in education (17.9% vs. 12.7%); health and welfare (12.6% vs. 10.7%); community and social services (6.4% vs. 4.7%); hotels and restaurants (6.1% vs. 4.7%); and public administration (8.2% vs. 4.7%). During the British Mandate, a law was passed requiring all buildings to be constructed of Jerusalem stone in order to preserve the unique historic and aesthetic character of the city. Complementing this building code, which is still in force, is the discouragement of heavy industry in Jerusalem; only about 2.2% of Jerusalem's land is zoned for "industry and infrastructure". By comparison, the percentage of land in Tel Aviv zoned for industry and infrastructure is twice as high, and in Haifa, seven times as high. Only 8.5% of the Jerusalem District work force is employed in the manufacturing sector, which is half the national average (15.8%).

Although many statistics indicate economic growth in the city, since 1967, East Jerusalem has lagged behind the development of West Jerusalem. Nevertheless, the percentage of households with employed persons is higher for Arab households (76.1%) than for Jewish households (66.8%). The unemployment rate in Jerusalem (8.3%) is slightly better than the national average (9.0%), although the civilian labour force accounted for less than half of all persons fifteen years or older—lower in comparison to that of Tel Aviv (58.0%) and Haifa (52.4%). Poverty remains a problem in the city as 37% of the families in Jerusalem lived in 2011 below the poverty line. According to a report by the Association for Civil Rights in Israel (ACRI), 78% of Arabs in Jerusalem lived in poverty in 2012, up from 64% in 2006. While the ACRI attributes the increase to the lack of employment opportunities, infrastructure and a worsening educational system, Ir Amim blames the legal status of Palestinians in Jerusalem.

The increasing number of educated Palestinians in Jerusalem has brought about positive economic changes. Through reforms and initiatives in sectors like technology, tourism, trade, and infrastructure, they have helped drive economic growth, create jobs, and improve living conditions in the city. Various joint summits between Israeli and Palestinian entrepreneurs have been held in the city. Palestine Investment Fund have proposed various projects in Jerusalem. Palestinian industrialist Bashar Masri sought to make heavy investments in the city. PA controlled industrial areas are located outskirts of Jerusalem, primarily in Bir Nabala, Abu Dis and Eizariya, engaging in manufacture of tires, food products and concretes.

High-tech industry is emerged among Palestinian society of Jerusalem. In 2023, Israel opened a technology park in East Jerusalem, known as EasTech. Local Palestinian engineers are employed in the complex by multinational companies, some of which includes AT&T, Natural Intelligence, Nvidia, Unity and Synamedia. Station J, an innovation hub is located in Sheikh Jarrah, which is yet another tech hub for Palestinians in the city. Hani Alami, a Jerusalem-based Palestinian entrepreneur has set up a start-+up accelerator. As a part of Israeli–Palestinian economic peace efforts, interaction between Israeli and Palestinian business community, also contributes in growth of Palestinian IT sector in the city.