The city of Jerusalem, once liberated from Seleucid rule by the triumphant Hasmoneans, experienced rapid population growth and expanded westward, while the rulers of the newly sovereign Jewish state enlarged and renovated the Temple complex. Lawrence Schiffman describes what the city looked like in the 1st and 2nd centuries BCE, setting the stage by relating the little-known epilogue to the Hanukkah story:
Contrary to what many think, the miraculous conquest and purification of the Temple on the 25th day of the Hebrew month of Kislev in 164 BCE was not the end of the Hanukkah story. . . . Through clever diplomacy and playing on the inner politics of the Jewish people, which still included some pro-Hellenistic elements, . . . the Seleucids managed to dislodge Judah the Maccabee and his supporters from the Temple. Then they installed Yakim (Alcimus), a Hellenist, as high priest. Judah and his men were left again to fight a war of resistance from fortresses in the Judean Hills.
After Judah’s death on the battlefield, he was succeeded by his brother Jonathan who was the commander of about 10,000 troops. When an internal conflict developed in Syria over who would rule, Jonathan wisely sided with the successful of the two pretenders to the throne and in return was granted official recognition as the ruler of Judea. He was then accepted by the people as ruler and high priest. It is he who effectively established the Hasmonean dynasty that lasted from 152 BCE through the Roman conquest of the land of Israel in 63 BCE. . . .
Soon after the accession of Jonathan, the city of Jerusalem began to grow. Over the course of the Hasmonean period it went from not much more than 5,000 residents to over 30,000. [Even] before the Maccabean revolt, the population had begun to expand westward from the area of the City of David, which had constituted the entire city during the time of Ezra and Nehemiah. Tremendous impetus was given to this process by the Hasmoneans when they began to rebuild the city walls that had surrounded the city in the time of the First Temple. . . .
The expansion of the city at this time took place on the Western Hill, more or less today’s Jewish Quarter in the Old City. This area had been settled during the time of the first Temple, but for the most part remained abandoned since [its] destruction.