Witnesses are the stars in the sky
For racism that is like a dream.
The whole world will testify
There will be no Arabs in the team!
I don't care how many and how they are killed,
Eliminating Arabs makes me thrilled.
Boy, girl or old,
We'll bury every Arab deep in the ground.

Beitar Jerusalem fans' song

The last days before a new season should be the days of hope. For Beitar Jerusalem fans, at least for the last 10 years, they have also been the days of fear as they have hovered between financial disaster and sugar-daddy-induced optimism. This summer was no different, apart from the cartoonish pace at which everything unfolded. 

With resources limited, fans feared the worst, but then the news broke: two Jewish-American fans, Dan Adler and Adam Levin, had agreed to buy the team and provide much-needed funds for redevelopment. But their joy soon faded: the two turned out to be peace-loving lefties, a despicably cruel joke on the part of fate.

The defining image of the 2009-10 season came in the final game as Hapoel Tel Aviv beat Beitar Jerusalem at the Teddy Stadium to win the championship; Hapoel Tel Aviv, with its "Give Jerusalem to Jordan, there's nothing good about it" song, lefty image and Arab players. As Walid Badir, the Arab-Israeli skipper of Hapoel, lifted the championship trophy in front of the jubilant Hapoel fans in Jerusalem, a city in which symbolism is part of everyday life, it was hard to miss the point. 

By May the following year, as the rest of the world spoke in awed tones of Barcelona's victory in the Champions League final at Wembley, Beitar's fans and directors were hoping for a minor miracle. After two troubled years the team were looking for a new owner, and the main candidate, the Brazil-born Jewish-American businessman and current sponsor of the club, Guma Aguiar, had just given a barnstorming interview. "I will come to Israel in a short time as the new owner of Beitar Jerusalem…" he said. "Next season I will put $20million into Beitar. I'm not looking to win one championship and then disappear. I saw Barcelona's match against [Manchester] United and I want to be at this kind of stage with Beitar. I want to bring Barcelona to Jerusalem".

"What is your motivation?" asked the interviewer.

"The love of the city of Jerusalem and the will to bless its name all over the world… I want to bring Avram Grant to work with me in some capacity. We met in the USA a month ago and we had a great talk. I believe that he is free now."

A day later Aguiar was committed to a mental health institute in Florida by his family. 

There are obvious jokes to be made linking that and his belief that Grant could found a Barcelona in Jerusalem, but the mental state of Aguiar, a young charismatic and loveable person is no laughing matter. Nor is the state of Beitar Jerusalem. 

15 years ago it looked like Beitar was becoming a club for all Israel. It had cross-sector appeal and played attractive football, and politicians queued up to be seen at games. By summer 2011, they were on the verge of catastrophe. The team was in debt, the squad was down to the bare bones and the owner, Arcady Gaydamak, was disillusioned. The club was desperate to find a new owner, but with attendances falling and the club's image one of racism, there was no rush of buyers. In a place prone to false messiahs, Aguiar was just one in a long line. They tend to flourish during crises.

This city has seen a lot of them. Over the years pilgrims have been overwhelmed by the thought that in ancient times, upon these streets and these clouded hills, walked Jesus Christ and King David. Every year about 10 tourists are referred to the local mental health institute with religious-themed obsessive ideas, delusions or other psychosis-like experiences, a phenomenon known as Jerusalem Syndrome. 

"Over the years we believed that people came to Jerusalem and got mad here," said the psychiatrist Dr Moshe Kalian in an interview with the Israeli paper Haaretz. "We believed that there was something about the city that made them go mad here, but our research shows that they come here with history of mental problems and Jerusalem is the stage on which they perform their big play."

It's February 2011 and I'm back in Jerusalem for the first time in years. Two decades ago, I lived here. The entrance to the city is now dominated by the huge Chords Bridge, a beautiful structure that looks out of place in the cramped surroundings. Nearby, a Hasidic Jew draped in a tallit rocks back and forth while praying. It's a city of great aspiration but its present is troubled.

At Morduch, a Kurdish restaurant in the souk, they've served the same marak kube for 30 years. At a table nearby a middle-aged man tells the young waitress how his life went wrong after he suffered shellshock during an operation in Lebanon. He asks her if she knows a good woman for him to meet.

At Bayit VaGan, Beitar's mishmash of portacabins and training pitches, overlooked by a wooden stand, it's eerily quiet. Hooded crows circle above the valley. In one of the offices I meet Itzik Kornfein, a former goalkeeper and captain of the team and now the general manager. "The club is under a cloud," he says. Beitar is fighting for their survival and their identity against debts, their own fans and time.

Founded in 1936 by members of the Revisionist movement in Jerusalem, Beitar had to fight for their niche in the city against Hapoel and Maccabi, and against the British Police team and later the British mandate in Palestine itself. The fan base and source of players was the Irgun, a hard-line paramilitary Zionist organisation. In the early forties, the British cracked down on the Irgun and many of the team's players were deported to east Africa, where they formed Beitar Eritrea. In 1947 the British governor of Palestine declared Beitar an illegal organisation and the club had to change its name to Nordia until the state of Israel was formed in May 1948.

Beitar got its name back but for more than 25 years it was an irrelevance in Israeli football. Hapoel teams enjoyed the support of the ruling Labour party and the Histadruth, a trade union representing most Jewish workers in the territory, while Maccabi Tel Aviv had always been a powerhouse of Israeli sport. Beitar was backed by right-wing Herut party (later the Likud) and directed endless bile and rage against the ruling powers. On the rare occasions when the team won the Jersualem derby against Hapoel, the cry around the city was "Evel BaHistadruth!" ("The Histadruth is mourning!"). 

Beitar were the underdogs. The team played in the tiny YMCA ground, a stone's throw from the luxurious King David Hotel. For years there was no proper stadium in Jerusalem; until 1991, the religious parties in the city refused to permit the building of one for fear that it would lead to the mass desecration of the Sabbath. Huddled up on tiny stands, Beitar fans, most of them — ironically, given Hapoel's origins — working-class, built a strong emotional relationship with the team. Many historians see Beitar's first major trophy, when they beat the old power of Maccabi Tel Aviv 2-1 in the 1976 Cup final, as prefiguring the 1977 election in which the Likud took power for the first time.

Beitar had the appeal and passion of a rebel. Many fans talk about their first Beitar game in terms of a conversion, of an irresistible power sweeping them off their feet. It was primal and often dangerous, but it was authentic. They won their first championship in 1987 in emphatic fashion, playing home games at the Bloomfield stadium in Tel Aviv, 40 miles from their Jerusalem home.

Although they were relegated in 1991, the nineties were Beitar's zenith. A magnificent stadium was finally built and the team spent just a season out of the top flight. In 1993 the newly promoted Beitar won the championship for the second time, this time in the newly-built Teddy Stadium.

It was the most frightening venue in Israel, a true bastion of invincibility. The stands were always full of fanatical yellow-clad supporters and the East Stand gained notoriety as the most vicious in Israel. Home defeats were not an option. In 1997, everything came together. Beitar, led by Eli Ohana, a gifted, handsome and cheekily charismatic striker who had played a key role in Mechelen's surprise European Cup-Winners' Cup success in 1988, played the most exciting football that any Israeli team has ever played. With a cast of the best Israelis and top Hungarian players, Beitar won their third championship. It looked then as though nothing could stop them from dominating Israeli football.

A second championship followed the next season and, although it wasn't as convincing as the first one, they still looked supreme. Beitar had the perfect image: they were underdogs, an unruly and exciting power that rose organically and represented the common people. But they were powerful underdogs. The Likud has rarely been out of power since 1977 and at Beitar's home matches it seemed half the government was sitting in the VIP stand.

The Prime Minister Benjamin Netanyahu, not much of a sports fan, exchanged headers at half-time in front of his adoring fans. Ehud Olmert, the Mayor of Jerusalem and later Prime Minister himself, was a regular at Teddy; at least he was a true fan. Generals, top civil workers and professors from the Hebrew University took pride in mixing with the common people. Beitar was almost the national consensus, with legions of fans and politicians behind the club. 

The situation couldn't be more different today. Beitar are outcasts as a brand, the club living hand-to-mouth and waiting for help from anybody who is mad enough to get involved. "We were an exciting team and the fans loved it," says the captain turned general manager Itzik Kärnten, "but we couldn't persevere. The management was not sophisticated and was based on friendship and donations. It was done by two or three people, without a real management operation. Although we had political support, the club never became a professional organisation." 

Beitar was run by incompetent or dubious characters for ages but the economic failure is just part of the story of their rise and fall. To understand Beitar, you need to understand Jerusalem, a bi-polar, intoxicating, hateful and heartbreakingly run-down and corrupt city —that is still somehow enchanting.

For all its history, religious sites, wars and importance, Jerusalem also has become one of the poorest cities in Israel. The statistics are telling: unemployment and family size are above the national average; income and education below. The city is divided between Arab and Israelis (in some parts by the infamous wall and at others by invisible walls), between secular and orthodox Jews, between a shrunken middle class and the rest. 

Beitar's support had always been capable of violence, but the full-blown racism only emerged in the nineties. At the start of the decade, Israel and the PLO embarked on a peace process. A breakthrough deal was signed at the White House in 1993 but led to a terror campaign in Israeli cities. Jerusalem was hit hardest. A minute's silence after another bus had been hit by a suicide bomber was the perfect stage for angry fans. A new chant was born: "Death to the Arabs".

Anti-Arab sentiment became the norm at Teddy. When Hapoel Taibe, the first Arab team to compete in the Israeli top flight, played at Teddy in 1997, they had to endure 90 minutes of chants and songs against Arabs and Muslims. The liberal media were up in arms — to the delight of the fans.

David Frenkiel is a maverick software developer who set up Beitar's first website. "The anti-Arab wave started after the terror attacks in the second half of the nineties," he explained. "The reaction from the media and the left led to a childish response. The more the fans were attacked the more their provocations grew. I'm not sure all those who chanted were racists but that's the way it was in the stand. You shouted exactly the same chants as the guy next to you. People blamed the ‘normal' crowd for not standing up against the racists but it was a ridiculous claim. Who wants to confront those people? So after a while it became the flag that the fans were waving."

Football is pretty much the one area in which everybody is equal in Israel. Israeli-Arab players have played for the national team since 1976 and for most club sides, bar one. Once "Death to the Arabs" was first shouted, though, a taboo was broken. During the glory years, the Teddy was full and it was easy to ignore the racist elements, but after the boom years came the bust.

Beitar always lived beyond their means, but the team continued to attract businessmen seeking publicity. In 2000 they seemed to have found a sugar daddy. He was an Israeli billionaire called Gad Zeevi. Eli Guttman, a promising up-and-coming manager, was recruited and star players were brought into a team of mini-galácticos. A new chapter of profligacy and incompetence was written. 

It was a disastrous season. Guttman (who came back to haunt Beitar with Hapoel Tel Aviv) was chased away by fans demanding more attacking and fluid football, and top administrators changed at alarming speed until Michal Zeevi, daughter of Gad, was appointed as general director. She came with a brilliant idea: to bring lions to Teddy to boost morale. Beitar ended the season with record defeat: 7-0 against Maccabi Tel Aviv.

The fans knew what had gone wrong. In August, a few weeks before the season had begun, the club had organised an extravagant show at Teddy. It was five days before Tishah Be'Av, a holy day of fasting and mourning to mark the destruction of the Jerusalem temple in 70 AD and the exile of the Israelites. A Kabbalah rabbi prophesied that the club would suffer seven lean years. He wasn't far off.

A year later, Zeevi cut all his ties with the club, leaving Beitar with no owner and no money to start the new season. Beitar received special dispensation from the Israel Football Association (IFA) and the league began with them in limbo. Any other club would have been shut down but, after they'd missed three games, Beitar found a new group of investors.

After four relatively quiet years, Beitar were bought out again, this time by Arcady Gaydamak, a Russia-born billionaire and the father of Alexandre Gaydamak, who would go on to own Portsmouth. He had made his money dealing arms in Angola. His arrival was sudden. In summer 2005, he bought the Hapoel Jerusalem basketball team and made a donation to Beitar. A quarter of an hour later he had 50% of the club and 48 hours later he became its new sole owner. 

It looked like a match made in heaven. Both Gaydamak and Beitar thrived on an underdog image, both enjoyed annoying the establishment and both liked to place themselves as true lovers of Israel and Jerusalem in contrast to hedonistic Tel Aviv and its teams. "The Mayor of Jerusalem is the representative of a universal moral," he said.

Gaydamak became a sensation. He gave millions to charity, hosted lavish parties and bought huge companies on a whim. His management style at Beitar was just as capricious. He fired managers on regular basis and when Beitar had a slow start to a season heads rolled: chairman, spokesman, marketing director, they were all out. But he put more money into Beitar than anybody had before: more than £50million in four seasons, an astonishing amount in a league like Israel's.

The best Israeli players joined the team. The likes of Luis Fernandez and Osvaldo Ardiles had stints as manager. In 2007 and 2008, Beitar won the championship again. The Teddy filled with glory-hunters jumping on the Gaydamak bandwagon. Among the new fans there emerged a distinctive group in the North Stand: La Familia.

It had been formed as a small fan club at an online forum a few years before and Gaydamak was happy to allow them into the system. He supported the group with flags, transportation and an open door, and in return enjoyed their vocal support. It was a doomed and costly deal.

"Don't underestimate them," said Professor Amir Ben Porat, a sociologist who has researched the organisation. "Many members are normal citizens with a firm ideology; they're not just mindless youth. Israeli football is not political anymore apart from Beitar, the leftist Hapoel Tel Aviv and the Arab team of Sachnin, but there are two teams in Israel with strong anti-Arab resentment: Beitar and Bnei Yehuda Tel Aviv. For radical Beitar fans, Israel is a Jewish Zionist state and Beitar is the most Jewish team. Their anthem speaks about a ‘Guerrilla army racist and hard / An army called fans of Beitar.'"

Highly motivated and well organised, La Familia became a significant power at the club. When the IFA took a firm stance against racism, the battle lines were drawn. To the usual anti-Arab shouts were added chants against the FA and songs of praise for the murderer of the former Israeli Prime Minister Yitzhak Rabin, who had sought to extend the peace process. Israelis were appalled. 

Gaydamak tried to distance himself from La Familia, but it was too late. In 2008 came the crash. After a succession of poor investments and police investigations combined with the global crisis, Gaydamak lost most of his money. To add insult to injury, he stood for the mayoral elections in November 2008. He got 7,988 votes, a humiliating 3.55%, and a valuable reality check. "If I could, I would have banned the fans from Teddy," he said after the debacle.

In the two seasons that followed, Gaydamak's investment in Beitar was zero shekels. The team had to sell players, cut jobs and adjust to a new dull hardship. The gloryhunters disappeared and La Familia became a more important factor than ever. The rift in the fan-base was clear, and in many games the Beitar crowd was torn between the racist element and those who were just there for the football. Far right-wing elements were happy to jump on the new bandwagon and ordinary football-loving people began to stay away from Beitar games. 

Where once almost every kid in Jerusalem was a Beitar supporter and the team had new fans coming to games from all over the country, now many local children and parents prefer to go to Hapoel Katamon, a fans' team that last year played in the depths of the fourth division. While Hapoel Tel Aviv compete in the Champions League, Beitar are fighting against relegation. "I don't think it was worth it," a senior figure at the club told me. "Almost nobody who was brought in during Gaydamak years is here now." 

"Winning championships is nice," says Frenkiel, "but I miss the old Beitar, the wild, special team."

"The price is heavy," says Hemi Uzan, the editor of popular Walla! Sport website. "Beitar has lost a big proportion of its fan base. Many fans stopped coming to games when the gloryhunters filled the stadium, and now they have gone as well."

The man trying to save the club is Kornfein. Over the past two years, he has had many meetings with potential buyers, but to no avail. Beitar, again, are looking for a saviour. 

In 2009 it was a $4m donation from Guma Aguiar that kept Beitar in Business. The 33 year old, who made his money drilling for gas in Texas hoped to buy the club, but in January 2010 he suffered a psychotic attack. The fact that Beitar again pinned their hopes on him gives an indication of the levels of despair.

"The loss of identity came in phases," says Kornfein. "It began with Gad Zeevi's team and the atmosphere of big money. Players without any link to the spirit of Beitar came and ran away once the money run out. Maccabi Haifa got stronger and Beitar fans had to make do with a poor reality. And then came Arcady with a lot of money, excellent players and the fans got used to attractive football and success, and winning became more important to them than identification with players. We have now a core of home grown players but the fans are still unhappy. There is a rupture among them because of the racism. People won't take it anymore and neither will we. As far as we are concerned this thing has no place in football. There are fans that refuse to bring their kids in to such an atmosphere. People want to come and have a good time. With the team not doing so well and the nasty atmosphere, people are turning away from Beitar." 

Kornfein is a man with a calm voice and a pensive look, but he is adamant. "We are saying it as clearly as we can and that's an act in itself. There were times when we used to pussyfoot around it, but now we are taking a clear stand against racism. We are taking part in an education programme in schools as well as cooperating with the police against the leaders. We have no intention of giving up. At first there was no dialogue with them but now there is a will to understand and work together. The leaders [of La Familia] sat here and were told that racism will disappear sooner or later. We want the change to come from within and [if it does] they will take credit for it. I have no illusions; it will take time, but we will insist on it and we need the help of the police, the ministry of education and the IFA."

I asked what they'd said when he met them.

"They have no logical explanation. ‘That's Beitar: that's how it always been,' they said. We try to tell them that our true ideology is respect for the other but to no avail. There is an attempt from members of [the outlawed right-wing party] Cahana to join and inflame the young fans. It has nothing to do with Beitar or football, it's just an attempt to manipulate young and thoughtless fans and we must stop it.

"Those fans, like all hooligans, love their team with all their heart. They will follow the team to every game. There are good fans but we must direct them. In the past, Beitar has suffered immense harm to its image, not counting the many games we have had to play behind closed doors as punishment. People don't want to be associated with us — I'm talking about potential owners and big national companies. Such firms don't want to have anything to do with such fans. We have great difficulties recruiting sponsors from outside Jerusalem." 

What Salim is doing here I don't know.
What can it be? I ask.
From everywhere I hear,
Toama, this the land of Israel!
This is the state of the Jews.
I hate you, Salim Toama.
I hate all the Arabs.

(Beitar fan's song)

Salim Toama is a Christian Arab-Israeli player. In the past he was willing to play for Beitar but it wasn't to be. Beitar is the only major Israeli club for which no Arab footballer has ever played. Actually, today the fans will not allow even a non-Arab Muslim player to wear the yellow shirt with the menorah. Such move would heal many of Beitar's woes but the opposition is too strong right now.

When the current Beitar captain, Aviram Bruchian, said that he would be happy to play alongside an Arab player he was summoned to an urgent meeting with La Familia. The next day he released the following message: "I'm sorry for the pain that I caused to the fans and I do understand that I've hurt them. It is important for me that they know that I'm with them in all circumstances. I'm not the one who takes such decisions but if the fans don't want an Arab player, there will be no Arab player in Beitar."

Post Script

Levin and Adler, the new peacenik owners, vanished when they had to transfer the first instalment of their investment. They didn't give their reasons, but Beitar provened to be a toxic brand once again. Two managers jumped ship before the season started, key players were sold and in a last bizarre twist a new sponsor was found. The International Fellowship of Christians and Jews, a philanthropic organisation founded by evangelistic American Christians, donated enough money for Beitar to make the deadline. A young, motivated team was put together and Beitar seemed to have some of the old fighting mojo back. Results soon went awry, though, and, at the end of October, La Familia tried to attack the management team following a 1-0 home defeat to Ironi Ramat Hasharon. Eternity goes on.