British street artist Banksy has returned with his latest politically-minded project: a nine-room hotel located next to the controversial barrier wall separating Israel from the Palestinian territories.

The Walled Off Hotel, located in the Israeli-controlled part of Bethlehem, has been opened as both a genuine business venture and a piece of protest art.

Work by Banksy and other artists, a themed bar and interactive exhibits all feature. The hotel directly overlooks a stretch of the West Bank barrier, and is described by Banksy as having the "worst view in the world."

According to the Guardian, Banky wants to attract jobs and tourists to the city, whose economy has been badly damaged following tight Israeli travel restrictions.

The artist told Channel 4 News that the hotel is “decorated to resemble an English gentlemen’s club from colonial times” in recognition of the historical role Britain played in the region.

Art works in the guest rooms include a caged painting of a vase of flowers, a picture of an Israeli border policeman and Palestinian in a pillow fight and security cameras attached to the walls like mounted heads.

The hotel is staffed by local people, none of whom were aware of the owner until today (3 March).

Banksy’s aim is to encourage dialogue, and the hotel will feature exhibitions by Palestinian artists. He has said people from all sides of the Middle East conflict are welcome to stay, and the project is not affiliated to any political group.

Some of the artist’s most famous stencils have appeared directly on the West Bank barrier wall, including a picture of two children with bucket and spade standing beneath a hole in the wall, revealing a tropical paradise beyond.

Previous high-concept Banksy projects include a twisted version of a Disney theme park in Weston-super-Mare, England and pet shop filled with animatronic animals in New York.