France-based utility giant Suez Environnement said Wednesday it has decided not to take part in the light rail project in the Israeli capital of Jerusalem because of “political sensitivities.”

The project, run by the Jerusalem city council, is meant to improve the difficult transportation situation in the crowded city by connecting various parts of the city, including the eastern half of the city that is home to roughly 200,000 Jews and around 230,000 Arab residents.

“To avoid any political interpretation, Suez Environnement has decided not to take part in this project,” the company said according to AFP.

Suez said its involvement in the project was limited to a feasibility study carried out by the consultancy firm SAFEGE, one of its subsidiaries.

“SAFEGE fulfilled a contract for Jerusalem municipality between June and November 2013, carrying out a feasibility study, from a technical perspective, on a public cable car system in Jerusalem,” it said.

The eastern half of Jerusalem, including the Old City, was liberated by Israel from Jordanian occupation in the 1967 Six Day War.

Recently Prime Minister Binyamin Netanyahu has been freezing Jewish construction in the eastern half of the city under American pressure, in a move seen as paving the way for an Arab capital to be established in the 3,000-year-old capital of the Jewish people.