A bright pink rucksack and books lay amid the remains of the Salhiyeh family home on Wednesday morning, beside mounds of rubble and rebar.
Heavily armed police guarded the site opposite the British consulate in Sheikh Jarrah, where mass protests erupted last year over the eviction of Palestinian residents.
The Palestinian Foreign Ministry condemned bulldozing the property as a “heinous crime”.
The demolition comes two days after Israeli forces arrived to evict the Palestinian residents, following a decision by the Jerusalem municipality to expropriate the land.
Residents had barricaded themselves at the home on Monday, with some taking to the roof with gas canisters.
Mahmoud Salhiyeh said he would set himself and the house alight if security forces moved in to evict his family.
The residents lost a legal challenge launched in 2017 against the property being seized.
Israeli police said numerous people had been arrested on Wednesday for “violating a court order, violent fortification and disturbing public order”.
The force published footage of people being led away from the property, with their hands tied.
The UN Office for the Co-ordination of Humanitarian Affairs said it was investigating reports of “injuries sustained by family members during the eviction”.
Mohammed Salhiyeh, a relative, said he had been unable to contact any of the evicted residents.
“Their phones are all off, we can't reach them,” he told Reuters.
“They didn't have a plan to go anywhere, they didn't think it was an option.”
The Joint List, an Arab-Israeli opposition alliance in parliament, said more than 22 members of the family were left homeless.
It accused the government of “targeting Arabs and working to ethnically cleanse them and steal their lands”.
The Jerusalem municipality, in a joint statement with the Israeli police, said the Salhiyeh family had been given “countless opportunities” to hand over the land.
“These illegal buildings had been preventing the construction of a school,” the statement said.
The family said they moved to Sheikh Jarrah before Israel wrested control of East Jerusalem in the 1967 Arab-Israeli war.
The Palestinians see the eastern part of Jerusalem as the capital of their future state, while Israel claims the entire city as its capital.
Tor Wennesland, the UN's Middle East peace envoy, on Wednesday called on Israel to "end the displacement and eviction of Palestinians".
"I still remain concerned by the potential eviction of a number of Palestinian families from homes they have lived in for decades in the Sheikh Jarrah and Silwan neighborhoods of East Jerusalem and the risk that such actions pose for escalating violence," he said in a video address to the UN Security Council.
In the first direct criticism of Israel since violence flared in Sheikh Jarrah last May, King Abdullah of Jordan said such actions undermine peace efforts.
"His majesty affirmed the need to halt the unilateral Israeli violations against the Palestinian brethren," the Jordanian news agency said.
British and EU officials were among those to visit the site this week in Sheikh Jarrah, which is home to numerous diplomatic missions.
The British consulate on Monday said evictions in occupied land “are against international humanitarian law in all but the most exceptional circumstances”.
Sheikh Jarrah became a focal point of Palestinian protest last year, over plans to evict dozens of residents from their homes.
The cases which initially drew demonstrations, have reached Israel’s Supreme Court, but judges are yet to make a final ruling.