(1) Background: although much research has highlighted the mental health challenges faced by patients in hospital isolation during the COVID-19 pandemic, data from low–middle-income countries, including Morocco, are lacking. The main objective of this study was to assess the psychological distress of patients undergoing enforced hospital isolation during the initial phase of the COVID-19 pandemic in Morocco. (2) Methods: we conducted a cross-sectional study between 1 April and 1 May 2020, among patients hospitalized in isolation for suspected or confirmed COVID-19 at the Ibn Sina University Hospital of Rabat, Morocco. Anxiety and depression were assessed using the Hospital Anxiety and Depression Scale (HADS). Binary logistic regression was performed to identify variables associated with anxiety and depression, with a cutoff of ≥8 used for both scales to create dichotomous variables. (3) Results: among 200 patients, 42.5% and 43% scored above the cut-off points for anxiety and depression, respectively. Multiple logistic regression identified female gender, a higher education level, a longer duration of isolation, and a poor understanding of the reasons for isolation as significant factors associated with anxiety. Conversely, female gender, chronic disease, a longer duration of isolation, and a poor understanding of the reasons for isolation were factors significantly associated with depression. (4) Conclusions: our study underscores high rates of anxiety and depression among patients forced into hospital isolation during the initial phase of COVID-19 in Morocco. We identified several factors associated with patients experiencing psychological distress that may inform future discussions on mental health and psychiatric crisis management.