Graves in Jerusalem

UPDATED: The Rambam (Mishneh Torah, Hilkhos Beis Ha-Bechirah 7:14) writes that one is not allowed to have graves in Jerusalem except for the graves of King David and the prophetess Chuldah. The Kessef Mishneh points out the Rambam's source in the Tosefta (Bava Kamma 1:7), which explains that the graves of King David and Chuldah had underground tunnels that let the impurity escape into a valley. Otherwise, graves are not allowed in Jerusalem. This also explains the story about Rabban Yochanan ben Zakkai's escape from Jerusalem's siege (Gittin 56a), in which he pretended to be dead and was carried out of Jerusalem in a coffin. Why did the Romans allow them to bury Rabban Yochanan ben Zakkai outside of Jerusalem, if not for the fact that Jews never buried people in Jerusalem because it was forbidden?

If this is the case, then we have to ask why it is so common for people today to be buried in Jerusalem. In particular the Mount of Olives is full of graves, many of them centuries old. And the Gemara (Shevu'os 16a) seems to say that the Mount of Olives was sanctified as part of Jerusalem. How can this be, if it is forbidden to bury someone in Jerusalem? Additionally, the bottom of the southern side of the Temple Mount (Area G) was used as a cemetery in the past, as has been documented in historical texts such as R. Ovadiah Bartenura's letter about his travels in Israel. This became a famous issue in 1981, when archaeologists wanted to dig in this area and the Chief Rabbinate forbade it.

R. Yisrael of Shklov writes in his Pe'as Ha-Shulchan (Beis Yisrael 1:63) writes that this law only applied when we observed the rules of purity and impurity. Nowadays, when we do not, it is permissible to bury someone in Jerusalem. Presumably, when we rebuild the Temple and once again observe the laws of purity and impurity, we will not have a problem of graves in Jerusalem because there will already have been a general resurrection of the dead. That there will be a general resurrection of the dead by that time is not something that is fully agreed upon by all, but this must have been the view of R. Yisrael of Shklov.

R. Shlomo Goren (Toras Ha-Medinah, ch. 17, p. 262) suggests another possible explanation. He notes the famous debate between the Rambam and Ra'avad (Mishneh Torah, Hilkhos Beis Ha-Bechirah 6:15) regarding whether Jerusalem's holiness remains after it has been destroyed. According to the Rambam it does while according to the Ra'avad it does not. R. Goren quotes a Meiri who says that the Jews in Jerusalem acted according to the Ra'avad's view. If so, then we understand why they would bury their dead within the boundaries of Jerusalem.