Construction of the Hilton-backed Waldorf-Astoria is in full swing at the site of the historic Palace Hotel on the corner of King David and Agron St., and is expected to boast a new standard in pampering upon opening.

The structure has been completely gutted, with the detailed outer walls, now a mere facade, serving as the only remnants of the original building. Despite its decrepit appearance, the former Palace Hotel is one of Jerusalem's most beautiful buildings, with numerous carvings designed as an amalgamation of Moorish, Roman and Arab architecture.

The Reichmann magnates purchased the structure from the Israeli government, closed a management deal with Hilton hotels, and together, they will be investing over $100 million in the development and branding of the refurbished hotel, destined to be the latest branch of the Waldorf-Astoria chain. The 223-room facility, due to open in march 2012, should eventually house five additional floors, several restaurants, a swimming pool, health club, spa, and hundreds of well-to-do tourists.