The case of Orient House is very simple, it is illegal. The Oslo Accords required the PA to refrain from carrying out any governmental activities outside the areas under its control, Arafat blithely ignored his commitments in this regard, seeking to gain a foothold in Jerusalem. Orient House spearheaded such efforts, serving as host to a range of activities such as intelligence-gathering, diplomatic meetings, and political sessions. Why is it that when Israel tries to get the PA to fulfill it's obligations under the Oslo accords it is provocative?
What you and most everyone else miss is the fact that many of the settlements did not just sprout up in 1967, but were long standing Jewish settlements. By the 19th century many non-Jewish travelers, from Mark Twain to British and French envoys documented the largely empty land of Palestine, empty except for long-established Jewish populations in Jerusalem, Safed, Nablus, Jericho, Hebron, and others. Jews lived in Hebron throughout the generations. The Arabs chased them out in 1929 after massacring most of them. The media constantly talks about traditionally Arab East Jerusalem (Jerusalem then consisted of only what is now known as East Jerusalem) yet in one of the 1914 issues of National Geographic the population of Jerusalem is given as 40,000 Jews, 13,000 Christians (half of whom were Europeans), and only 7,000 Muslim. The Etzion Bloc was settled by Jews on purchased land, they were massacred in 1948.