The old city is technically part of the area taken in the 67 war, which is the areas which are usually talked about when refereing to palastine. But unlike the

The old city is technically part of the area taken in the 67 war, which is the areas which are usually talked about when refereing to palastine. But unlike the west bank, it was formally annexed by israel, it contains jewish holy sites such as the west wall, it is not currently part of the PA and I doubt anyone is seriously expecting it to be part of a future palastinian state (in a two state solution at least).