BETHLEHEM, West Bank: Bethlehem, the traditional birthplace of Jesus in the Israeli-occupied West Bank, is seeing the return of celebrations after two years of war in Gaza.

With a shaky ceasefire in place, Palestinians hope the festivities will bring a more peaceful future to the region.

For the past two Christmases, John Juka's family restaurant in Bethlehem has been closed and unusually empty.

But on the evening of December 6, it was lit up with strings of red lights — a hopeful sign in a Palestinian city that has been struggling since the war in Gaza began.

"It's not like it was before the war," said 30-year-old Juka. "But it's like life is coming back again."

Tourism and religious pilgrimages have long driven Bethlehem's economy. According to the local government, around 80 percent of the Muslim-majority city's residents depend on it.
Those earnings support communities across the West Bank, a region already facing economic hardship.

"When we have 10,000 visitors and pilgrims sleeping in Bethlehem, that means the butcher is working, the supermarket is working, and everybody is working," said Bethlehem Mayor Maher Nicola Canawati. "There's a ripple effect."

That economic lifeline disappeared when war broke out in Gaza after the Hamas-led attack on southern Israel on October 7, 2023. Major Christmas celebrations were canceled during Israel's retaliatory offensive.

At the same time, Israel's military intensified operations in the West Bank, including near Bethlehem.

The unemployment rate in the city jumped from 14 percent to 65 percent, the mayor said. Poverty surged, and about 4,000 people left to find work elsewhere.

A United Nations report last month said the West Bank is experiencing its worst economic downturn on record, citing ongoing Israeli military operations.

Now, Bethlehem residents are eager for recovery.

"The decision we took was to reignite the spirit of Christmas and to reignite hope," the mayor said. "I think this sends a great message to the whole world that we Palestinians love life and want a peaceful solution."

On Saturday, crowds guarded by heavily armed police cheered after a prayer for peace. Fathers lifted children onto their shoulders as a tall Christmas tree lit up Manger Square, near the site where Christians believe Jesus was born.

For families like Juka's, who struggled to keep their businesses alive during the war, seeing the crowds felt like a deep breath after years of uncertainty.

In November, tourist visits to the city reached their highest level since the war began, Canawati said, and hotel reservations suggest occupancy will be around 70 percent during Christmas.