The correct answer is - A) contains the Dome of the Rock, where Muhammad ascended into heaven.
The Jewish people consider Jerusalem as a holy place because of numerous reasons, but none of those reasons is connected with the prophet Muhammad and the Islam. The Judaism is much older religion than the Islam, so by the time the Islam came on the world stage, all of the sacred places of the Judaism have been long before established.
Some of the reasons why Jerusalem is considered as a holy city in the Judaism are the ''wailing wall'', being a historic capital of the Jews, as well as Mount Moriah.