He lie's too. They were running terror operations (and entertaining reporters) from Orient House. That aside, The Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip clearly states where the PA's political offices are to be located, in article 1.7
The offices of the Council, and the offices of its Ra'ees and its Executive Authority and other committees, shall be located in areas under Palestinian territorial jurisdiction in the West Bank and the Gaza Strip.
not to mention the fact that the PA couldn't conduct "foreign relations" under Oslo to begin with.
9-5-a In accordance with the DOP, the Council will not have powers and responsibilities in the sphere of foreign relations, which sphere includes the establishment abroad of embassies, consulates or other types of foreign missions and posts or permitting their establishment in the West Bank or the Gaza Strip, the appointment of or admission of diplomatic and consular staff, and the exercise of diplomatic functions.
Orient House was illegal under Oslo from the start. A classic case of how ignoring violations legitimizes them to palis and their cohorts.