In April 1950, Jordan annexed eastern Jerusalem (dividing the city for the first time in its history) and the “West Bank” areas in historical Judea and Samaria that Trans-Jordan had occupied by military force in 1948 (Jordan changed its name to Trans-Jordan in April 1949). On April 24, 1950, the Jordan House of Deputies and House of Notables, in a joint session, adopted a Resolution making the West Bank and Jerusalem part of Jordan. This act had nobasis in international law; it was only the de facto act of Trans-Jordan as a conquerer.The other Arab countries denied formal recognition of the Jordanian move and only two governments – Great Britain and Pakistan – formally recognized the Jordanian takeover. The rest of the world, including the United States, never did.
Jordan's annexing of the West Bank, though it nominally expanded the Hashemite Kingdom, provided few benefits for King Hussein. As a result of the Six Day War in 1967, Jordan lost control of the lands west of the Jordan River, including East Jerusalem. Israel began its administration of the territories, which continues today. Jordan not only suffered heavy casualties but also lost much of its best farmland and, as well, had to cope with hundreds of thousands of Palestinian refugees who fled the Israelis by crossing the Jordan to the east.
Jordan maintained an uneasy relationship with its Palestinians, now the majority east of the Jordan. The Palestine Liberation Organization (PLO) constantly incited the Palestinians against Jordan even though Jordan gave them citizenship and in general treated them better than any other Arab land. By 1970 the PLO became such a threat to Jordan, and an international embarrassment for Jordan because of their terrorism, that King Hussein drove them out of Jordan.
In the 1970s several peace plans for Israel and the Palestinians were proposed that would have put Jordan in control of the West Bank, but these were rejected by Yasser Arafat who wanted an independent state. With the election of Menachem Begin as Israeli Prime Minister in May 1977, it became Israeli policy under Likud to keep the West Bank, known to Israelis by the biblical names of Judea and Samaria. Peace ideas involving Jordan became moot weakening Jordanian motivation to engage in a conflict with the PLO on that front.
Attempting to find a working solution between Jordan and the PLO, King Hussein let the Palestine National Council meet in Amman, and in 1985 he agreed to aid the PLO in coordinating a joint peace initiative. Hussein wanted a confederation of the West and East Banks with autonomy for the Palestinians but under Jordanian rule. Arafat was happy to agree to confederation between a future Palestinian state and Jordan, but his vision always included independence for the West Bank. In February 1986 talks between Hussein and Arafat broke down. Hussein needed assurances from Arafat that he would renounce violence and recognize Israel but such an undertaking was never given. Hussein declared that Jordan would be responsible for the economic welfare of the West Bank Palestinians and, as well, he raised the number of Palestinian seats in the National Assembly.
Hussein hoped to outflank the PLO and reach some accord with Israel, that would leave Jordan with some control of the disputed land. In April 1987 Hussein and Shimon Peres, Israel's foreign minister, agreed to a UN-sponsored conference that would include Palestinian representatives as part of a Jordanian-Palestinian delegation. In spite of American assent to the plan, Israeli prime minister Yitzhak Shamir refused, wanting the conference to include only Jordan and not the PLO.
In December of 1987 the first Intifada, the Palestinian uprising on the West Bank and in Gaza, changed the entire situation for Jordan. Hussein supported the Intifada publicly and offered aid in an attempt to keep, or regain, Palestinian confidence. But Hussein's attempts at being seen as a friend of the Palestinians were rejected as Arafat became the spokesman for the Palestinians.
In summary, the Arab and international recognition of the PLO as "the sole legitimate representative of the Palestinians," the overwhelming PLO victory in the 1976 municipal elections in the Territories, and the fact that seventy percent of the Jordanian population is of Palestinian origins, made it impossible for Jordan to compete with the PLO over representation of the Palestinians in the Territories without jeopardizing its domestic stability.
In July 1988, in response to the accumulated pressures and the months of intifada demonstrations by Palestinians in the West Bank, King Hussein of Jordan ceded to the PLO all Jordanian claims to the territory. Any hopes of a Jordanian-Israeli resolution to the Palestine problem were effectively ended. He dissolved the Jordanian parliament, half of whom were West Bank representatives, and stopped paying salaries to over 20,000 West Bank civil servants. When the Palestine National Council recognized the PLO as the sole legal representative of the Palestinians, Hussein immediately gave them official recognition.
Although the establishment of an independent Palestinian state in the West Bank posed a potential threat to Jordan as a Hashemite kingdom, Hussein gambled that this was less of a threat than the possibility of Jordan to become the alternative homeland for the Palestinians. By taking Jordan out of the way, relinquishing any claim of sovereignty, he sought to move solutions toward the Palestinian state in line with the desires of Arafat and the PLO.