The Old City
The advantage to staying in the Old City is that you feel the rhythms and hear the sounds of this extraordinary (and largely car-free) place -- the calls to prayer from the minarets, the medley of bells from the city's ancient churches. You'll watch the bazaars come to life in the morning and slowly close down for the night; you'll catch glimpses of street life that a visitor based in the New City would never see. You won't come across any high-rise (or even low-rise) luxury palaces in the Old City, just a few inexpensive to moderately priced hotels, hospices, and hostels. The crime rate in the Old City, as in all of Jerusalem, is low, but the streets here (except for parts of the Jewish Quarter) are deserted at night and can seem intimidating. You'll need a spirit of adventure and an enjoyment of labyrinths and Casbah-like alleyways in order for this to be the right part of town for your base.
The Zion Square/Ben-Yehuda Mall area is the place to stay if you want to be in the midst of the city's lively restaurants, cafes, and bars, and in an area where you can stroll, shop, and people-watch in the evenings. A number of hotel choices are a few blocks farther south, in the King George Street/King David Street triangle, within walking distance or a short bus ride of Zion Square. Farther south you'll find a number of pleasant hotels in the interesting neighborhoods of Abu Tor and the German Colony (you'll need a bus or taxi to get to Zion Square, but it's less than a 5-min. ride). The outlying Bus Station/Sderot Herzl area on the western side of town is the fourth major West Jerusalem hotel area. It can be a 20-minute or more bus ride into Zion Square from this area, and you'll need a taxi on Shabbat; the better distant hotels offer shuttle service into town.
Zion Square, Jaffa Road & Ben-Yehuda Mall -- Step out of your hotel, and you'll be right in the heart of the downtown shopping-and-restaurant district, with a great variety of cafes, window-shopping, and people-watching possibilities. The area is noisy, and in summer, discos add to the roar of traffic.
King George Street & King David Street -- A few blocks from the Ben-Yehuda/Zion Square triangle you'll find a group of hotels along the southern reaches of King George Street, which becomes Keren Hayesod Street. About a kilometer (1/2 mile) from Zion Square, Keren Hayesod runs into King David Street, and there's another cluster of hotels going north back toward the center of town. The distance to Zion Square from most of these hotels is walkable, but because it is uphill and in the hot sun, many will want to take a bus or taxi, particularly after a hard day's touring. Nearby are Liberty Bell Park, charming Yemin Moshe, and the Cinémathèque, with its hillside of neighboring cafes and restaurants.
Western Edge of City/Sderot Herzl -- Stretching from the area of Jaffa Road near the Central Bus Station to the area of Sderot Herzl that runs toward the residential neighborhood of Beit Ha-Kerem, this area offers modern expensive and moderate choices. There's not much that's interesting within walking distance of most of these hotels, and the highway system in the area does not lend itself to excursions by foot. But they are all close to major bus routes into the center of town; the better, more distant hotels offer free shuttle service to various points in the city. This area is not far from the Knesset and Government Center, the Hebrew University's Givat Ram Campus, and the Israel Museum.
South of the King George Street/King David Street area, you'll likely use buses or taxis to get to the center of town, although you may find the half-hour walk interesting. Two atmospheric hospices are located in the Abu Tor and German Colony neighborhoods. Hebron Road, with views of the Old City, also offers two hotel choices. A half-hour municipal bus ride from the center of town, you'll find a large kibbutz hotel in the Judean mountains on the edge of the desert.
With the construction of the Olive Tree Hotel, the Grand Court, and the Jerusalem Novotel, the axis of good hotels in East Jerusalem has shifted to the extreme western edge of this part of town. For decades, most of East Jerusalem's hotels had been located in and around Saladin Street, the bustling main shopping thoroughfare of the area. These hotels, like the neighborhood in general, have not aged well, and a band of new, upper-moderate hotels is being built just to the east of Hwy. 1, which divides the eastern and western parts of the city. This area is relatively convenient to West Jerusalem and has always been home to East Jerusalem's best and most vibrant hotels -- the legendary American Colony Hotel, and the moderate Jerusalem Hotel -- as well as the best Christian guesthouses (Notre Dame and St. George's). East Jerusalem's best restaurants are also beginning to accumulate in this area. There are still a few good hotel choices left in East Jerusalem's downtown center, and also on the Mount of Olives, with its wonderful views. Most of East Jerusalem's hotels are within walking distance of the Damascus Gate.
The atmosphere of downtown East Jerusalem is Palestinian, and the genuine helpfulness and hospitality found in many of East Jerusalem's hotels is very much in the Arabic tradition. As a rule, East Jerusalem hotels offer good value and are somewhat less expensive than those in the western part of town. Be forewarned, however, that the area is relatively dead at night, and that many of the cheaper hotels not listed here are run-down and smoky.
Most East Jerusalem hotels raise their prices by 20% to 25% during the Christmas and Easter holidays.
Mount of Olives
To the east of downtown East Jerusalem, the Mount of Olives is a bit out of the thick of things, but some returning visitors wouldn't dream of staying anywhere else. It's a downhill walk to the Old City and East Jerusalem, and there's no public transport over to West Jerusalem, so you may find yourself resorting to taxis, especially at night. But your rewards for staying in this area include incredible views of Jerusalem and almost bucolic, spiritual surroundings. Note: Women should not walk on the Mount of Olives unescorted at any time.