At issue is a $600,000 donation by the Chicago-based International Fellowship of Christians and Jews earmarked back in 2003 for the social welfare department of the Jerusalem Municipality.

The organization, which raises tens of millions of dollars each year for Israeli welfare projects, has withheld half a million dollars of the total donation to the city since Jerusalem Mayor Uri Lupolianski has refused to take part in a photo-op with the group's president, Rabbi Yechiel Eckstein, in recognition of the group's donation, Eckstein said in an interview Tuesday.

The group's president had previously said that the dispute was resolved, and that the money had been claimed. But, in a reversal, Eckstein said Tuesday that repeated phone calls, and correspondences with the mayor's office over the photo-op have gone unanswered, leading the group to actually withhold the bulk of the funds.

Lupolianski's spokesman Gidi Schmerling said Tuesday that the mayor would be happy to meet with the group's president provided that the money is given up front, due to the organization's "long history of unfulfilled promises" regarding money-transfers.

In a written statement, the city spokesman listed four promised donations that the group's president had previously made to the municipality, both during Lupolianski's term and that of his predecessor, including relief aid for a deadly Jerusalem banquet hall collapse, only to have them subsequently reduced or canceled outright.

The long-running feud between the city and the organization, which has simmered on a low-burner for the past 18 months, was condemned by Jerusalem opposition leader Nir Barkat who urged the mayor in a December letter to reach a solution so that the badly-needed money can get to Jerusalem's needy.

It was not immediately clear Tuesday why the charity kept the ongoing dispute under wraps for the past 18 months, something Eckstein said stemmed from an intention not to embarrass the haredi mayor, who has been criticized by the opposition in the city for shying away from meetings with Christian Evangelical leaders, who have been among Israel's strongest supporters during the past four years of violence.

However each side appeared to be holding it's ground Tuesday with Eckstein saying that he "does not have time" to "play politics" with the Municipality of Jerusalem, and the head of the city's chief fund-raising body, the New Jerusalem Foundation, Tzvi Raviv, accusing Eckstein of using the good will of the Christian Evangelicals for "ulterior motives," including his own ego. The group said this week that it has contributed $22 million to Israeli welfare projects nationwide in the last year alone.

Ironically, while the municipality continued to squabble with the charity over receiving the donations, the organization recently gave $11,000 to Yad Sarah, the well-respected volunteer organization Lupolianski founded a quarter century ago which provides free medical equipment and services to needy Jews and Arabs alike. The charity subsequently received a thank you note for the donation.