History - Antiquity:

This city has known many wars and various periods of occupation. At one time it was a city of the Jebusites. Later it came under Jewish control. The Bible, supported by archeological finds, records that King David defeated the Jebusites in war and captured the city without destroying it. David then expanded the city to the south, and declared it the capital city of the united Kingdom of Israel.

Later, still according to the Bible, the First Jewish Temple was built in Jerusalem by King Solomon. The Temple became a major cultural center in the region, eventually overcoming other ritual centers such as Shilo and Bethel. By the end of the "First Temple Period," Jerusalem was the sole acting religious shrine in the kingdom and a center of regular pilgrimage. It was at this time that historical records begin to corroborate the biblical history, and the kings of Judah are historically identifiable, and we learn of the significance the Temple had.

Near the end of the reign of King Solomon, the northern ten tribes split off to form the Kingdom of Israel with its capital at Samaria. Jerusalem then become the capital of the southern kingdom, the Kingdom of Judah.

Jerusalem was the capital of the Kingdom of Judah for some 400 years. It had survived (or, as some historians claim, averted) an Assyrian siege in 701 BC, unlike Samaria, the capital of the northern Kingdom of Israel, which had fallen in 722 BC. However, the city was overcome by the Babylonians in 598 BC, who then took the young king Jehoiachin into eternal captivity, together with most of the aristocracy of that time. However, the country rebelled again under Zedekiah, prompting the city's repeated conquest and destruction by Nebuchadnezzar. The temple was burnt, and the city's walls were ruined, thus rendering what remained of the city unprotected. After several decades of captivity and the Persian conquest of Bablyon, the Persians allowed the Jews to return to Judah and rebuild the city's walls and the Temple. It has continued to be the capital of Judah, as a province under the Persians, Greek and Romans, with a relatively short period of independence. The Temple complex was upgraded and the Temple itself rebuilt under Herod the Great. That structure is known as the Second Temple.

The city was ruined yet again when a civil war accompanied by a revolt against Rome in Judea led to the city's repeated sack and ruin, by the hands of Titus at 70 AD. The Second Temple was burnt, and the whole city was ruined. The only remaining part of the Temple was a portion of an external (retaining) wall which became known as the Western Wall, the name Wailing Wall being used exclusively by non-Jews or Jews estranged from their heritage.

History - First millennium:

Sixty years later, the Roman emperor Hadrian ordered the city to be resettled, under the name Aelia Capitolina. Jews were forbidden to enter the city, but for a single day of the year, The Ninth of Av (see Hebrew calendar), when they could weep for the destruction of their city at the Temple's only remaining wall. The Byzantine Empire, which came to control the region in after the split of the Roman Empire, cherished the city for its Christian history. However, in accordance with traditions of religious tolerance often found in the ancient East, Jews were allowed into it in the 5th century A.D.

Although the Koran does not mention the name "Jerusalem", Islamic tradition holds that it was from Jerusalem that the Prophet Muhammad ascended to heaven in the Night Journey, or Isra. The city was one of the Arab empire's first conquests in 638 AD; according to Arab historians of the time, the Caliph Umar ibn al-Khattab personally went to the city to receive its submission, cleaning out and praying at the Temple Mount in the process. Sixty years later, the Dome of the Rock was built, a structure in which there lies the stone where Muhammad is said to have tethered his mount Buraq during the Isra. This is also reputed to be the place where Abraham went to sacrifice his son (Isaac in the Jewish tradition, Ishmael in the Muslim one.) Note that the octagonal and gold-sheeted Dome is not the same thing as the Al-Aqsa Mosque beside it, which was built more than three centuries later.

Source: Wikipedia (http://en.wikipedia.org/wiki/Jerusalem)