The history of the Swedish consulate in Jerusalem dates back to 1901, when Herman Zethelius proposed its establishment due to the increasing Scandinavian presence in the city.

Over the years, the consulate's responsibilities expanded to include monitoring the Israeli–Palestinian peace process and facilitating development cooperation initiatives.

The Swedish consulate's role remains pivotal, providing consular services, promoting dialogue, and contributing to peace-building efforts in the region.

At that time, the Scandinavians numbered around 110 people, including those who had become American citizens but still felt a strong connection to their countries of origin.

Most Scandinavians were poor but skilled artisans and farmers, engaged in fruit preservation and weaving, which had potential for trade in Palestine.

[2] The consulate was established with a district comprising Palestine and the city of Damascus, which area was restricted to only the Jerusalem Sanjak at the time of the announcement of the exequatur.

The consulate's primary task was to "protect and safeguard these Swedes, to teach them not to forget their mother tongue in their English-speaking surroundings, and to strengthen their national sentiments."

[11][12] Möllerswärd was succeeded by Arnold Hjertström, who established himself as consul in East Jerusalem in April 1967, when that part of the city was still under Jordanian control.

[14] In 1993, there were eight career consulates general in Jerusalem, namely Belgium, France, Greece, Italy, the United Kingdom, Spain, the US, and Sweden.

The consuls then had a special status, based on the Ottoman millet system that granted certain rights and autonomy to religious minorities, as well as on treaties that the Sublime Porte was forced to conclude with the European powers from the 15th century onwards.

At the turn of the 20th century, these treaties meant that foreigners were not subject to Ottoman law, were exempt from taxes, and their residences and businesses were immune.

Other countries that previously had consular representation in Jerusalem, such as Germany and Russia, have attempted to reopen their missions but have encountered obstacles due to a lack of continuous presence.

The consulates monitor the status quo principles and the corpus separatum idea and also have a role as observers of the Palestinians' situation under Israeli occupation, in accordance with the Geneva Conventions.

The consulates general in Jerusalem, which do not have exequaturs or diplomatic status, also have, in addition to their regular duties, a special observer role that is unique in the world.

Additionally, the Consulate General actively monitors and communicates developments in the Israeli–Palestinian peace process, maintaining dialogue with the Palestinian Authority.

Furthermore, it oversees Swedish development cooperation initiatives in Palestine, aimed at fostering democratic state-building efforts and advancing the peace process.

Upon the purchase in 1991, the house underwent a complete renovation by architect Bo Myrenberg [sv] and was also redesigned to serve as a residence.

An important part of the renovation was to increase the surface area of the residence, and to achieve this, the former terrace was integrated into the building to serve as a new dining room.

The expansion was characterized by facades mostly made of glass and a curved roof, which evoked associations with tents and market stalls.

One of the walls in the guest toilet at the main entrance was adorned with locally hand-painted tiles inspired by mosaics from an older building in Bethlehem.