In 1962, two Saigon military pilots, Nguyễn Văn Cử and Phạm Phú Quốc, flew two AD6 planes to bomb and collapse the entire left wing of the Palace in a rogue attempt to assassinate Ngo Dinh Diem. As it was impossible to restore, Ngô Đình Diệm had it leveled and a new palace was built on the old site according to the design of architect Ngô Viết Thụ, the first Asian to become an Honorary Fellow of the American Institute of Architects and also the first Vietnamese to be awarded the prestigious Pritzker Architecture Prize.

In July 1962, Ngô Đình Diệm decided to start rebuilding the Palace. During the construction of the new Palace, Ngô Đình Diệm’s family temporarily moved to the Gia Long Palace (now the Hồ Chí Minh City Museum).

The construction was still unfinished when the Ngô Đình Diệm brothers were assassinated by the coup plotters in 1963. Therefore, although Ngô Đình Diệm was the one who initiated the construction of the Independence Palace, he did not live there for a single day. The person who lived in this palace the longest was President Nguyễn Văn Thiệu (from October 1967 to April 1975).

In 1975, it was the venue for the National Reconciliation Conference. Therefore, the Independence Palace was also renamed the Reunification Hall. However, many people still often call it by its familiar name, the Independence Palace.