Art. 64. The penal laws of the occupied territory shall remain in force, with the exception that they may be repealed or suspended by the Occupying Power in cases where they constitute a threat to its security or an obstacle to the application of the present Convention.
Subject to the latter consideration and to the necessity for ensuring the effective administration of justice, the tribunals of the occupied territory shall continue to function in respect of all offences covered by the said laws.
The Occupying Power may, however, subject the population of the occupied territory to provisions which are essential to enable the Occupying Power to fulfil its obligations under the present Convention, to maintain the orderly government of the territory, and to ensure the security of the Occupying Power, of the members and property of the occupying forces or administration, and likewise of the establishments and lines of communication used by them.
Art. 65. The penal provisions enacted by the Occupying Power shall not come into force before they have been published and brought to the knowledge of the inhabitants in their own language. The effect of these penal provisions shall not be retroactive.
Art. 66. In case of a breach of the penal provisions promulgated by it by virtue of the second paragraph of Article 64 the Occupying Power may hand over the accused to its properly constituted, non-political military courts, on condition that the said courts sit in the occupied country. Courts of appeal shall preferably sit in the occupied country.
Art. 67. The courts shall apply only those provisions of law which were applicable prior to the offence, and which are in accordance with general principles of law, in particular the principle that the penalty shall be proportionate to the offence. They shall take into consideration the fact the accused is not a national of the Occupying Power.
The Jerusalem Town Council was relieved by the Government-UNRWA decision to transfer the Mu'askar Camp in the Jewish Quarter of the Old City to another site in Anata, a few kilometres away. The site chosen for their resettlement was mostly formerly Jewish-owned land; hence the transfer would not be at the expense of the natives, nor would it raise problems of confiscated land. Furthermore, showing the refugees that they still occupied Jewish land would perhaps give them some satisfaction and a kind of tangible security, while naming the new camp Shu'fat attracted refugees, it being in a salubrious neighbourhood where many villas were built. Nevertheless, most refugees refused to move as they feared losing both their source of income—the market and the tourists—and the opportunity to pray in the second most holy place [sic] for Muslim believers. Consequently the army had to transfer them by force to their new camp as late as 1965.
Another UNRWA-Government scheme was in the Ramallah area where eight concentrations of refugees were to be broken up and given land of their own. The Government wanted to resettle them near the Broadcasting Station away from the town's entrance. UNRWA refused to carry out the project as it knew it was bound to encounter problems. It was also not its policy to build new camps or to take over unofficial ones since it wanted to dilute refugee concentrations.
However the T.C. was anxious to move the refugees and promised it would provide and be responsible for sanitation facilities and would cover the land's rental for the first year, after which the Government would pay. UNRWA agreed. The old houses which disfigured the town were to be demolished and the many non-refugees were to be evacuated by the Police to their respective villages.
This is the Jordanian law that Israel inherited, which was based on previous British and Ottoman laws.
(Incidentally, Jordan also would demolish houses of opponents of the regime, relying on British regulations that allowed the military to demolish the house of anyone suspected of violence, in its Palestine Defence (Emergency) Regulation 119.)
In short: If Israel legally annexed Jerusalem, it can apply its own zoning laws. If Israel occupies parts of Jerusalem, it is obligated to apply previous zoning laws which allow demolition of illegally built structures.
The EU's claim that Israel enforcing existing zoning laws is illegal is completely wrong.