One of the major issues in doing archaeology in Israel is that often times villages and towns in the last one hundred years have been built over major archaeological ruins. Often times people did not realize how large ancient cities were or that the current city walls were not were walls were in ancient times. So what happens when you realize it?
The modern town of Bet Shean was built on top of the ruins of Bet Shean. Bet Shean was the largest city in the Decapolis - ten Roman cities in a sea of Semitic culture. While downtown Bet Shean was excavated, modern Bet Shean was built over the ancient residential areas. Even archaeologists were not immune from these mistakes. In Megiddo, archaeologists placed their buildings (including the first tennis courts - and more importantly - flush toilets in the land of Israel) off of the tel - but right on top of the lower city.
The most contentious spot, it goes without saying - is Jerusalem. While most people who found out that they were living above the home of a historical figure such as Benjamin Franklin, Cleopatra or Hammurabi would be willing to move in moment (especially for financial compensation), in Jerusalem it is not so simple. In the area of the ancient City of David - the area of Jerusalem for the first several thousand years of its existence but which had been outside the Ottoman walls - an Arab neighborhood was built about 100 years ago which has been greatly expanded since 1967. Israel of course is greatly interested in excavating the area - and has done so through the City of David Foundation. However, politics get involved very quickly. Palestinians don't want Israel to find any ancient ruins which strengthen the Jewish connection to the city. While offered millions of dollars to move, they often refuse the offer, either for nationalist reasons (or the fact that they like their homes and don't want to move) or purely survival instincts: the Palestinian Authority [which does not have authority in Jerusalem but does have a great amount of influence] has made it illegal to sell land to a Jew - on punishment of death. So yes, it is complicated.
Which makes what is happening in the Galilee town of Mi'ilya so fascinating. What happens when a family finds out that they are living on top of a Byzantine church/monastery? Check out the incredible saga here: https://www.haaretz.com/archaeology/.premium-now-the-israeli-village-excavating-itself-found-a-byzantine-church-1.9138316
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