For two years during the Gaza war, all public celebrations for Christmas were cancelled in Bethlehem in the occupied West Bank – where Christians believe Jesus was born.

But after the recent ceasefire, the holy city decided that this year the festivities would return as symbolised by the lighting of its traditional, giant Christmas tree in front of the historic Nativity Church.

“It’s been a bad two years of silence; no Christmas, no jobs, no work,” says Bethlehem Mayor Maher Canawati. “We’re all living here from tourism and tourism was down to zero.”

The mayor accepts that the idea of resuming celebrations was not without controversy, as suffering continues in Gaza – including for those in its tiny Christian community, many of whom have relatives in Bethlehem.

“Some may say it’s not appropriate and others say it’s appropriate,” Mr Canawati tells me. “But deep inside my heart, I felt that this was the right thing to do because Christmas should never be stopped or cancelled. This is the light of hope for us.”

Locals – both Christians and Muslims – pose for selfies in front of the tree hung with red and gold baubles in Manger Square. They are joined by a handful of foreign tourists.

Brightly coloured lights now decorate the streets and there are signs advertising Christmas bazaars and children’s parties.

“We’re very happy to have the tree, first thing, and to see foreigners in Bethlehem and to be able to celebrate Christmas in its true spirit,” says local jewellery designer Nadya Hazboun.

“This is where it all started, so this is where we can send the message to the world of what really Christmas should be about. And this year, if Christmas is peaceful, then I hope it will bring a nice message for the whole world.”

The neighbouring towns of Beit Jala and Beit Sahour are also planning to light Christmas trees in the coming days. Hotels – which have stood largely empty for the past two years – have an influx of bookings from Palestinian citizens of Israel as well as some foreign visitors.

One tourist from Russia, Angelica, is on her second pilgrimage to the Holy Land. “I think everyone needs to come at least once in their life,” she tells me.

“I hope a lot of people will soon come back because it’s sad without many tourists. The only thing that’s good is that you don’t have long lines – you can come and see more things. When I came before you had to wait in line for a few hours minimum.”

For now, the souvenir stores dotted around Bethlehem have little business, and outside the cream-coloured walls of the Nativity Church, which date back to the Fourth Century, tour guides largely stand idle. Prior to the Gaza war, it was often crammed with people.

One guide, Hamza, is worried that ongoing news coverage makes people feel the situation is still dangerous. He insists it is safe.

“This is a tourist city; without tourism there is no life,” Hamza laments. “We hope to have people coming back like before: from Europe, the Middle East, America, Latin America and everywhere. We start with the Christmas tree lighting, and we’ll wait.”

In the past two years, unemployment has skyrocketed in Bethlehem. Since the deadly Hamas-led attacks on southern Israel in October 2023 which triggered the war, tens of thousands of Palestinian labourers from the West Bank have been blocked from entering Israel and its settlements for work.

Meanwhile, public servants have received only partial salaries by the Palestinian Authority (PA) – which governs parts of the West Bank. The PA relies on tax revenues collected by Israel which it is withholding – to the tune of $1.76 billion, according to the UN’s trade and development agency.

Israel says it is holding the funds because the PA makes payments to Palestinian prisoners that incentivise attacks on Israelis. The authority – which has been under international pressure to make reforms – says it has recently changed its welfare system

The grim economic outlook means that for many Palestinian Christians, even though there are now public events as well as religious services, it will be an austere Christmas.

At the edge of Manger Square, a few customers are waiting to buy sizzling balls of falafel from a row of shops.

“We’re preparing for Christmas after one of our hardest periods as Palestinians and as Christians,” says Alaa Salameh, an owner of Afteem, a decades-old family restaurant which has seen its income plummet. He says that recently many families could not even afford falafel – a cheap, traditional snack.

“Christians will try to celebrate but according to their situation,” Mr Salameh anticipates. “Someone who wants to take his kids to a festival or the theatre or whatever, he doesn’t have the money to spend for this celebration.”

In the cave-like grotto at the base of the Nativity Church, a local woman follows a small Indian tour group, stooping down by a silver star which marks the spot where it is said that Jesus was born and lighting a candle nearby.

With tensions still high across the region, people in Bethlehem say they are praying for peace – and hoping for tourists to come back to the place where it is believed Christmas began.