The surrounding village residents of Wadi al-Hummus told local media that 16 residential buildings, including 100 apartments were bulldozed on Monday morning.
He wanted to live in East Jerusalem but was unable to build there as Israel rarely gives building permits to Palestinians.
This move may set a worrying precedent that will set aside the protection of Palestinian Authority controlled area and allow Israeli authorities to now demolish thousands of homes in the West Bank.
Palestinians fear that the razing of homes and buildings near the barrier will set a precedent for other towns along the route of the barrier, which runs for hundreds of kilometres around and through the Israeli-occupied West Bank.
Seven years ago, the Israeli army banned construction of all buildings within 250 meters of the barrier, which Israel erected as a security mechanism during the second Intifada, the bloody Palestinian uprising against Israel, in the early 2000s.
Tension was reported Monday in east Jerusalem with the start of the demolition by Israeli crews of 14 Palestinian buildings in the area of Zur Baher, right next to the separation barrier with Palestinian autonomous areas.
"The increase in the occupation's crimes against the residents of the holy city is a result of total American support", said Hazem Qassem, a spokesman for the militant group.
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Although Zuma was forced to create the Zondo Commission, he is not legally required to participate in its present proceedings. They additionally employed several Zuma family - in conjunction with the president's son, Duduzane - in senior positions.
They also point out that most of the buildings in Wadi al-Hummus area, located inside Sur Baher, are meant to be under the Palestinian Authority and civilian control under the 1993 Oslo accords.
They were filmed and photographed by Palestinian, Israeli and worldwide activists who had mobilised to try and stop the demolition.
Jamie McGoldrick, the United Nations humanitarian coordinator, and other UN officials called on the Israeli authorities last week to halt the demolition plans.
Sur Baher in Southeast Jerusalem is one of those places.
A statement from the European Union called Israel's actions illegal under worldwide law and said such policies "undermined the viability of a two-state solution and the prospects for a lasting peace".
It said it had "the aim of exposing the journalists - some of whom come from countries that do not have diplomatic relations with Israel - to Israeli positions on diplomatic and geopolitical issues". But some lies in between: just outside the Jerusalem line but still on the Israeli side of the barrier.
Israel credits the obstacle - projected to be 720 km long when complete - with stemming Palestinian suicide bombings and shooting attacks. Most of the neighbourhood is in what authorities call Area A under the control of the Palestinian Authority.