Concierge.com's insider take:
The American Colony Hotel is a converted 19th-century pasha's palace within East Jerusalem, close to the walls of the Old City and the Damascus Gate. The Relais & Châteaux hotel was opened more than a century ago by an American family—hence the name—and has been lavishly appointed in East-meets-West style. Some suites have settees and canopy beds. Meals are served in an interior courtyard under the shade of palm trees, and the outdoor pool is enclosed by the regal stone walls of the former palace. It all adds up to a quiet escape from the city's hubbub, where you're likely to see everyone from visiting journalists and UN workers to wealthy Palestinian families out for a weekend lunch.