The building that housed the Post Office from 1903 until it was closed on 1.10.1914 is in the Old City of Jerusalem, opposite the Jaffa Gate. The Imperial (Vice-)Consulate installed in 1849 in Jerusalem, at the time part of Ottoman Empire, maintained its postal links with the home country by means of steamers operated by Osterreichische Lloyd serving the port of Beirut. When Lloyd extended its services to cover Jaffa, an Austrian postal service was set up between the two towns.
The Austrian Post Office in Jerusalem was opened in 1859 following an agreement between the Austro-Hungarian Foreign Ministry and the Sublime Porte. The mail was transported over the 70 kilometre route by guards from the consulate with packhorses, later carriages. Valuables in the mail attracted robberies by Bedouins, leading to the deaths of both the mail couriers and Turkish gendarmes. This explains why postage was very expensive. At the beginning of the 1870s, a letter to central Europe cost around 1 gold franc. Although France and Russia, and later the German Empire and Italy also operated post offices in Jerusalem, pilgrims and locals had most trust in the Austrian service. Not even the Turkish sub post office operated by a Jewish resident in the Israelite quarter of the city, which used a postmark in Hebrew letters and allowed a considerable discount on the sale of stamps, was able to compete. The end of the Austrian Post Office in Palestine and the rest of the Ottoman Empire, as for all the other foreign postal installations, came suddenly when the Turkish government used the outbreak of World War I as the occasion for revoking the special rights enjoyed by foreigners and foreign pos offices on its territory.