The Walled-Off Hotel in Bethlehem is only four metres (yards) from the controversial wall which cuts through the occupied West Bank, and all the rooms face it.
The nine rooms, which Banksy described as having the "worst view of hotel in the world," range from $30 for a bunk bed in one room to $965 per night for the presidential suite.
Guests, who will each put down a $1,000 deposit to ward off theft of the dozens of new Banksy works on the walls, were due to start arriving early afternoon, hotel staff said.
It bills itself as the hotel with the worst view in the world. And it doesn't disappoint.
Nearly every window from the Walled Off Hotel opens up to a 30-foot wall of concrete. It is the first ever hotel designed and financed by Banksy, the world-famous, but anonymous, graffiti artist.
His mark already visible on the concrete wall outside the entrance of the hotel is even more evident in the 9 guest rooms and presidential suite.
Construction and preparation of the Walled Off Hotel began 14 months ago. Banksy did most of the artwork himself, from the cherubs on life support hanging above the player piano to the Israeli soldier pillow fighting with the masked Palestinian above one of the beds.
Manager Wissam Salsaa said they were nearly totally booked for the next three months.
We have arrivals today from six different countries, and I think most of our clients are flying just to stay here, he said.
He rejected criticism the prices were unaffordable for many Palestinians, saying they had nearly 50 staff to pay and any profits would go back into the community.
Everyone that came here thinks this is the most amazing project, he said. For letting the voice of the Palestinians be heard.
The hotel was announced unexpectedly at the beginning of the month and the artwork, Banksy's largest new collection in years, has been donated to the local community, the hotel's website says.
The artist closely protects his identity and was not in attendance at the launch.
Two rooms were set aside for other artists, who were kept almost entirely in the dark until the hotel was nearly complete.
"It's been pretty mental to be honest. It's been a crazy journey just (being) locked in here," laughed Dominique Petrin, a Montreal-based artist who was invited to do one of the rooms.
She has spent the last month locked in her room, not allowed to see the rest of the hotel. Her room is the most conservatively decorated to a point.
I made this room like a nice, lushy, colonial room, said Petrin, but when you look at some details, you see something is really going wrong. You know when things are going so good, but at the same time it's apart?
Each room has its own unique style. One room is painted to look like the guest is surrounded by concrete walls, and yet somehow, the room still manages to feel comfortable.
Another room feels like an army barracks furnished with bunk beds with foot lockers.
The presidential suite, complete with its own mini-theater, study, and bar, also has a luxurious jacuzzi. But the water for the jacuzzi comes from what appears to be a water tank speckled with bullet holes.
Instead of a gym, the hotel has a museum. The exhibition is dedicated to enlightening visitors about the separation barrier and providing context, while being painstakingly careful not to pick a side in the Israeli-Palestinian conflict that surrounds the hotel.
It's meant to be a space that's both empowering and informing for people, said Gavin Grindon, the museum's co-curator.
At the entrance to the museum sits a lifelike figure of former British Foreign Secretary Lord Arthur Balfour, whose Balfour Declaration of 1917 expressed the UK's support for establishing a "national home for the Jewish people" in British-mandate Palestine.
One hundred years later, Balfour is still one of the most controversial figures in the conflict thanked by Israelis, detested by Palestinians.
It's exactly one hundred years since Britain took control of Palestine and started re-arranging the furniture - with chaotic results, said Banksy in a press release handed out at the hotel's opening.
I don't know why, but it felt like a good time to reflect on what happens when the United Kingdom makes a huge political decision without fully comprehending the consequences, the statement read, referencing in one line Balfour and Brexit.
The hotel sits in Area C, a portion of the West Bank under Israeli control. That means both Israelis and Palestinians are allowed to visit.
A few steps away is Area A, where Israelis are forbidden, while many Palestinians face major restrictions in Israel. The Walled Off Hotel is intended as a place of meeting a safe space for discussion.
The hotel itself, in its art and its literature, refuses to take one side while acknowledging both.
The wall divides the nation of Palestine from the state of Israel and restricts movement between the two for citizens of both sides, the hotel's website reads.
Depending on who you talk to its either a vital security measure or an instrument of apartheid.
Its route is highly controversial and it has a dramatic impact on the daily lives of a lot of people. The one thing beyond dispute is that everything here is under dispute.
The wall, mere steps from the hotel's front door, has been described as the biggest canvas in the world.
Political graffiti, art, and different messages adorn nearly the entire length of the wall as it cuts between Jerusalem and Bethlehem. Banksy painted nine pictures on and near the wall a decade ago.
An art supply store is connected to the hotel in case guests want to add their own message to the separation barrier.
Walls are hot right now, but I was into them long before Trump made it cool, Banksy said in his statement.
The wall is one of the most striking symbols of Israel's 50-year occupation, and has become a major focus for demonstrations and artwork including by Banksy.
Israel refers to it as the security barrier and insists it is crucial for keeping out would-be attackers, but an advisory opinion by the International Court of Justice declared it illegal in 2004.
The hotel's website encourages guests to explore the possibility of painting on the wall with a graffiti supplies store next door with everything you need to make your mark.
There was no major launch party planned, with staff dressed in red waistcoats serving Walled-Off Salads and afternoon tea in the lobby.
A few tourists mulled around inspecting the gallery selling Palestinian art and a museum highlighting the history of the region.
Bea Kaufmann, a German living in the Israeli commercial capital Tel Aviv, said she had come with friends as she thinks it is important to see the other side of the conflict.
The rooms themselves have a deliberate faded luxury, with typical Banksy touches.
Above a bed in one room an Israeli soldier and Palestinian protester fight with pillows, while a television supposedly showing CNN is cracked and backwards.
In the presidential suite, a working jacuzzi is fed from a leaking water tank similar to those that adorn the roofs of many Palestinian homes.
The museum's curator, British professor Gavin Grindon, said earlier this month they wanted to highlight the negative impact of Western intervention.
A lot of other hotels have a gym, this one has a museum.
It is 100 years that British people have been coming here and making a bit of an imperial mess, from Tony Blair all the way back to Lord (Arthur) Balfour in 1917.
The Balfour Declaration, signed by then British foreign secretary Balfour in 1917, promised the Jews a homeland in what was then mandate Palestine.
The agreement is hailed by Israel as paving the way for its creation in 1948 and detested by Palestinians, who say it gave away their homeland.
Banksy has a long history in the Palestinian territories.
In February 2015, he allegedly sneaked into the Gaza Strip through a smuggling tunnel and painted three works on the walls of Gaza homes destroyed in Israeli air strikes during the previous year's conflict.
In 2007, he painted a number of artworks in Bethlehem, including a young girl frisking an Israeli soldier pinned up against a wall.
In 2005, he sprayed nine stencilled images at different locations along the eight-metre-high (27 foot) wall.
They included a ladder reaching over the wall, a young girl being carried over it by balloons and a window on the grey concrete showing beautiful mountains in the background.
His works, like elsewhere in the world, have become tourist attractions.