The building, which is believed to be a part of a two-storey structure demolished in 70 AD by Roman legions during a Jewish revolt, was uncovered during a six-month excavation in a parking lot outside the walls of Jerusalem's Old City.
So far, the archaeologists have discovered a five-meter high wall, storerooms, living quarters and ritual baths, ceramics, ancient coins, and polychrome frescoes.
The director at the digging site, Doron Ben-Ami, said the mansion might have been the palace of Queen Helena, a wealthy aristocrat who ruled Adiabene, a region in modern-day Iraq, but then converted to Judaism and settled down in Jerusalem.
"We need more evidence to decide, but almost everything fits," Ben-Ami said, adding that the latest excavation could prove that Old Jerusalem was much larger than previously thought.
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Infographics: World War I, 1914-1918