Iconic Mount of Olives Intercontinental Hotel, Adored by Jerusalemites and Tourists Alike, Under Threat

The former Intercontinental Hotel, now named the Seven Arches Hotel, in the East Jerusalem neighborhood of al-Tur, is a distinctive landmark in the city. Millions of pilgrims and tourists have visited it over the years, especially to take photos of the unparalleled panoramic view of the Old City.

Jerusalemites, too, visit the hotel to get away and enjoy some peace and quiet. Many come in the evenings especially to watch the majestic sunset behind the golden Dome of the Rock, or even in the early morning hours to enjoy the first rays of sun from the east, announcing the start of a new day.

The opening of Jerusalem’s Intercontinental Hotel in 1964 received global attention. Built atop the highest point on the Mount of Olives, the hotel was the late Jordanian King Hussein’s passion project where he hosted heads of state, dignitaries, and other international figures. Overlooking the Jordan Valley and the mountains of Amman from the east, and Jerusalem, its mountains, and the al-Aqsa Mosque from the west, the picturesque hotel was known for its beauty and serenity.

Over the years, the hotel hosted thousands of weddings for Jerusalemites in its beautiful back garden. Asaad Rami, 55, told Jerusalem Story that he still remembers the distinctive restaurant for which the hotel was famous, where his father insisted on taking the family once a week to eat steak cooked on a large, very hot stone, giving it a unique taste.1

Jerusalem Story reached out to a number of senior hotel staff members who declined to speak publicly for fear of being reprimanded by Israeli authorities, who forbid them from speaking to the media. This is because these days, many are afraid for the fate of the iconic hotel, which Israeli authorities have been trying to wrest out of Jordanian hands since they first occupied East Jerusalem in 1967.

Designed by the famous US architect William B. Tabler, who designed more than 400 hotels around the world, the Intercontinental Hotel is built on 30 dunams of land the Jordanian government leased from the Islamic Waqf Department. Construction began in 1962 and lasted for two years. Holy to Christians, the site is believed to be the first stage of Jesus’s trail of suffering, where he is said to have been crucified after enduring great agony.

Two years later, in 1964, the construction of the hotel was completed. For the Jordanian government, contracting the InterContinental Hotels Group to manage the new hotel was a way to invest in Jerusalem as a premier tourist and cosmopolitan destination. Indeed, it served as the meeting place for the late King Hussein’s esteemed guests in Jerusalem, and the Palestine Liberation Organization (PLO) held its first session of the Palestinian National Council (PNC) there in May 1964.

According to informed sources who requested anonymity, after Israel’s occupation of East Jerusalem in 1967, the hotel remained under the management of the InterContinental Hotels Group. But in 1968, a contract was signed transferring management of the hotel to the Israeli government as absentee property for 20 years. In 1988, however, the First Intifada was in its first year, and the international hotel group elected to give up its concession due to the security situation.

Management of the hotel was transferred to the Israeli Ministry of Finance and the Custodian of Absentee Property. The ministry decided to establish a local company to manage the huge hotel located on a 30-dunum plot of land; and thus, the Seven Arches Company was established. The company made it so that the ministry would not be responsible for paying employee salaries, but rather, the company would finance this through the operation of the hotel, provided that the ministry covers the deficit in the event that the hotel’s revenue from tourism declined.

By 2011, the hotel was in terrible condition and was no longer suitable for the tourist market. In addition to essential external restoration, the furniture inside was very old; locals began comparing it to Soviet-style hotels. An Israeli company was hired to provide an assessment of the building, concluding that it was in urgent need of restoration. The Ministry of Finance allocated more than 40 million US dollars for this purpose.

The first phase of renovation was completed in 2016, and the hotel began receiving guests in 2017. Large groups of tourists from all over the world, especially Christian pilgrims, flocked to the hotel. Local Jerusalemites also began holding weddings and other big occasions there.

But danger always lurked, threatening the hotel's ability to operate. Anwar Mahmoud, a Jerusalem businessman familiar with the hotel, told Jerusalem Story that the greatest threat to the hotel began to emerge in 2011 after extremist Israeli Jews settled in a nearby house.2 As with other settler groups across occupied East Jerusalem, their goal was to pressure the government to allow them to seize the prized hotel and Judaize it.

As Mahmoud explained, over the years, these groups have tried to convert the hotel into a Jewish religious school, or even a base for students of the Israeli Air Force. Each time, the Jordanian government, which still owns the hotel, intervened, leading the Israeli government to back down.

Others told Jerusalem Story that in recent years, interventions by Jewish settler groups have intensified, demanding that the hotel be converted into a Jewish kosher hotel. These interventions have not been met with as decisive Jordanian action, which has whetted the appetite of extremist groups.

Palestinians have appealed to the Jordanian government to intervene more decisively and forcefully to preserve this landmark in Jerusalem. This is especially crucial given that, under the current extremist Netanyahu administration, the Israeli government is said to be seeking to hand the hotel over to a foreign company, claiming it can no longer finance it. However, Jerusalem Story has learned that the plan involves more than just hotel management; it entails an investment of tens of millions of dollars to fundamentally alter the hotel in line with the government’s plans to Judaize East Jerusalem.

A prominent Jerusalemite who requested anonymity explained that it has become known that these so-called external companies are ultimately political groups. “It’s a global phenomenon,” he said. “There will certainly be an external funder with unknown objectives that we may soon discover if the relevant authorities, especially the Jordanian government, don’t intervene before it’s too late.”3

This news surfaces also amid the latest stories that the US and Israel are pushing to replace the Jordanian Waqf Department as custodians and managers of Al-Aqsa Mosque, a historic and longstanding arrangement (see Hashemite Custodianship of the Holy Sites of Jerusalem: A Century of Dynastic Authority and Protection). Their aim is to abruptly terminate the Jordanian Ministry of Awaqf’s role, strip the site of its Muslim identity, and create a new body to oversee the site as a “multi-faith” center.4

Thus, prime Jordanian interests in Jerusalem are under serious threat.

Meanwhile, IHG Group has announced plans to open a new hotel, “Jerusalem's first new luxury hotel in a decade” according to their website, called the InterContinental Jerusalem in early 2027.