The October 10th ceasefire came in time for Bethlehem to prepare for seasonal celebrations and an influx of local and foreign pilgrims and tourists. Hotels, restaurants, cafes and shops selling olive wood and mother-of-pearl souvenirs have opened in the expectation of the revival of commerce. While hotels have received reservations from mainly Palestinian citizens of Israel, bookings were being made by international pilgrim groups beginning in February 2026.

 

Israel's war on Gaza and crack down on the West Bank have forced the celebrations to focus on the religious significance of Christmas instead of encouraging marching bands, street parties, and vociferous vendors. Pope Leo XIV sent a message assuring townspeople that he “carries Bethlehem in his heart and prayers and is working for an end to Palestinian suffering.” He called on Palestinians in Gaza “not to give in to despair.”

 

The December 24th-25th midnight mass can be expected to be well attended at the Catholic St. Catherine's church in Bethlehem while the Orthodox Church of the Nativity will hold its service overnight on January 6th-7th.

 

Two-year cancellation of Christmas celebrations delivered a major blow to Bethlehem’s economy. Unemployment leapt from 14 to 65 per cent, mayor Maher Nicola Canawati said. Poverty soared to 33 per cent and about 4,000 people left the town to find work. He asserted, "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. There’s a ripple effect.”

 

Due to Israeli military operations, a November United Nations report said the West Bank has been experiencing its most severe economic downturn on record. Widespread poverty could discourage West Bankers from going to Bethlehem during the holidays.

 

A chief cause of West Bank poverty is that public servants have received only partial salaries from the Palestinian Authority (PA), which administers the West Bank enclaves. The PA relies on the transfer of billions of dollars in tax and customs revenues collected by Israel, according to the UN's trade and development agency. Israel says it is withholding the funds because the PA makes payments to Palestinian prisoners and their families, encouraging attacks on Israelis.

 

One of the main attractions for politically minded visitors is The Walled Off Hotel, built by Britain's secretive activist-artist Banksy, which has reopened its doors.The 8-year-old hotel stands across from the Israel's West Bank wall and all the rooms have a view of grey concrete slabs garnished with barbed wire. By undertaking this risky venture Banksy sought to bring tourists to occupied and isolated Bethlehem so they would understand how Palestinians live under the tight control of Israel's military. Hotel manager Wisam Salsaa said the hotel's art gallery which displays works of Palestinian artists "is a living testament to resilience, identity and the unbroken spirit of a people who refuse to disappear.”

 

Bethlehem depends on pilgrim visits, particularly during the Christmas season when visitors fill the hotels with guests and busloads of around 3,000-day trippers walk about town. Artisans producing mother-of-pearl and olive wood artifacts, shops selling these and other local items, and cafes and restaurants expect business to pick up after December 20.

 

The 45-50,000 West Bank Christians, 2 per cent of the population, and 1,000 Gazan Christians, 1 per cent, must obtain Israeli permits to enter both Bethlehem and Jerusalem. Israel has built a 2.4-meterhigh wall and compelled visitors to pass through checkpoints and gates to reach both cities. The wall isolates the hill town from Jerusalem, making the journey between them last an hour or more instead of 15-20 minutes.

 

Palestinian Christian emigration has taken place since early in the 20th century, but Israeli military operations, settler violence and economic hardship have increased and accelerated departures in 2024 and 2025. Many Christians have relatives in Australia, Latin America and the US who encourage them to leave the land where Christianity was born. This has led to predictions that in coming years, the Palestinian Christian community could be represented only by caretakers of churches, instructions and holy sites.