In December 1947 the Jewish Agency and Ben Gurion appointed him head of the Jerusalem Emergency Committee; he continued to serve in that position during the early part of the 1948 Arab-Israeli War, during the Blockade.

He was initially appointed Minister of Rationing and Supply in the first government, a key position during the austerity period.

The first government collapsed in October 1950 due to wranglings over refugee camps and religious education, but also because Ben-Gurion wanted the Rationing and Supply Ministry closed down.

He retained this position in the new government formed by Moshe Sharett after Ben-Gurion had resigned to go and live on Kibbutz Sde Boker.

Joseph caused a political scandal when he published in 1960 an autobiographic book, "The Faithful City", which focused on the siege of Jerusalem in 1948.