In the 1948 Arab-Israeli War, Orient House remained east of the cease-fire line, in the area occupied by Jordan. In 1948-1950, the UNRWA headquarters were located in the Orient House; two years later, its owner turned it into a luxury hotel called "The New Orient House". Following the 1967 Six-Day War and the capture of East Jerusalem by Israel, the hotel was closed and the building mostly neglected.
In 1983, the Arab Scientific Association, really a façade for PLO's local branch, led by Faisal Husseini, rented a part of the house. In 1988, Israel closed the house and forbade PLO activity in it. It was renewed 4 years later in 1992. It was then rented and renovated by Faisal Husseini. In an exchange of letters preceding the 1993 Oslo Accords, Israel promised that it would allow the house to operate in the future.
In August 2001, following the events of the al-Aqsa Intifada, Israeli authorities took over the house again. Among the documents found inside, they claim to have found evidence for tight connections and support between the political leadership of the PLO and its Fatah militant wing, widely considered a terrorist organization.