(Corrects to "Jewish" from "Israeli" in paragraph 15. Event took place before establishment of Israel)
By Wafa Amr
JERUSALEM, May 11 (Reuters) - Eighty-year-old Beatrice Habesch sobbed when she caught sight of her father’s house in Jerusalem on Sunday and remembered how it was taken over by Jews in 1948.
"This is our house! This is my house!" she shouted as fellow Palestinians held her back from running towards the building.
Some 300 Palestinians marked 60 years since Israel’s founding in May 1948 with a protest walk through affluent Jewish parts of west Jerusalem that were once home to many Arabs. They wore black T-shirts with "This is my House" printed on the back.
The Palestinians said their families had owned houses in Talbiyeh, German Colony and other districts until Israelis drove them away or they fled in the Arab-Jewish fighting that accompanied the creation of the state of Israel.
Habesch said her father, a merchant, had owned property in Talbiyeh and that he had had friendly relations with his Jewish neighbours, letting part of his property to them.
One of their neighbours, she said, was Golda Meir, who as Israel’s prime minister in the 1970s refused to acknowledge the existence of Palestinians.
"I was 19 during the war in 1948. I remember two men and a woman came to our house and told us to leave. They said our house would be bombed if we did not leave," Habesch said.
Like many of the 700,000 or so Palestinians who fled their homes in 1948, the Habesch family thought they would return after the war between Israel and the Arab states was over.
But they never did.
The demonstrators pointed at houses, many decorated with Israeli flags marking the 60th anniversary of independence, and recalled their former Palestinian owners: "This is the Dajani house. That is the Nammari house. This is the Halaby house."
ISRAELIS LOOK ON
Israelis watched from porches, mostly in silence, though one man who trailed the marchers yelled: "Arabs out!"
"Most Israelis react defensively or aggressively," said Tomer Belity, an Israeli teacher at a school in Talbiyeh.
"They are afraid and full of hate because they think the Palestinians want to get us out of here."
Nahla Assaly, 70, was 10 when she and her family left their house in the German Colony, now a haven for well-heeled bohemians. "We left our house because we panicked," she said. "People panic during wars."
Assaly said her family heard of the killings of dozens of Arabs by Jewish guerrillas at Deir Yassin, a village near Jerusalem, in April 1948. Fear set in. When the shooting came closer to home, it was time to leave.
"Bullets came through our doors and windows, so my father took us to Damascus for what he thought would be a couple of weeks," Assaly recalled. "But we never came back."
She said she felt bitter about the festivities surrounding Israel’s 60th Independence Day, including this week’s visit by U.S. President George W. Bush, who is sponsoring a drive for an Israeli-Palestinian peace deal by the end of this year.
"Bush is coming to celebrate. Why? Did anybody go to South Africa to celebrate apartheid? This whole idea of celebration is a mockery of peace."
"Let the Israelis admit their wrongdoing in 1948," said Assaly. "Then there will be room for healing." (Editing by Kevin Liffey)