At Christmas time the town of Bethlehem traditionally becomes a focal point for Christians around the world. Tradition has it that Jesus Christ was born there, and in years past Bethlehem hosted throngs of worshippers who came to celebrate that event, and attend the traditional midnight mass at the Church of the Nativity on Christmas Eve.

This is supposed to be a special time for Bethlehem, when this town so central to Christianity celebrates the birth of Christ.

In years past, a huge Christmas tree would stand in Manger Square, and bright colored lights would glisten on buildings all around. Marching bands and bagpipes would play as the Latin Patriarch, the highest ranking Roman Catholic clergyman in the Holy Land, was escorted to the Church of the Nativity. But, this year's Christmas Eve festivities are subdued and bleak in comparison to the past.

The crowd on Manger Square numbered only in the hundreds in mid-afternoon, and was made up mostly of local residents. The municipality refused to put up a Christmas tree to protest Israel's occupation of the town. There were no bright lights and no marching bands only a Palestinian boy scout troop to escort the Partriarch.

Like many local residents, prominent Palestinian legislator, Salah Tamari, looked around at a very unfestive looking Manger Square and lamented the lack of Christmas spirit.

"It speaks for itself. No Christmas tree. You don't see joy. Maybe young people are joyful because they have the chance to be out because the curfew is lifted," he said, "we lived under curfew for almost 45 days. It's the first time they enjoy freedom of movement. Not because it's Christmas. There's no Christmas atmosphere here."

The local residents who did turn out included young and old, men and women, Christians and Muslims, and they seemed genuinely glad to be able to walk about freely.

Since the most recent wave of Israeli-Palestinian violence began over two years ago, Israeli troops have repeatedly surrounded and moved in and out of Bethlehem. Their most recent re-occupation of the town came last month after a suicide bomber from the area blew himself up on an Israeli bus, killing 11 people.

But, the Israeli military lifted the curfew and moved its troops out of the center of Bethlehem early Tuesday morning.

That allowed local residents some relief and provided an opportunity for protest rallies. Palestinian activists converged on Manger Square, carrying placards calling for an end to Israeli occupation and for the creation of a Palestinian state. A few hundred Israeli peace activists came to Bethlehem to show their solidarity.

A young Palestinian activist from the nearby village of Beit Sahur named Nada Khair said people here should not have to celebrate Christmas under an Israeli siege.

"It's really strange for us," he said. "We just want to let the people know how much we are suffering here."

For the second year running, Israeli authorities have refused to allow Palestinian leader Yasser Arafat to come to Bethlehem for Christmas festivities. But, Mr. Arafat's supporters made sure his portrait was displayed prominently all around Manger Square.

Despite the bleak political situation, Palestinian lawmaker Tamari said one can never give up hoping for better times.

"Our quest is freedom. We cannot live under occupation forever. Occupation is a form of slavery. We will not accept that," Mr. Tamari said. "We'll fight until we get our freedom. And we believe the world will not leave us alone in our struggle."

Israeli troops have said that over the Christmas holidays they'll stay out of the center of town if the security situation allows. What that means for the Palestinian residents of Bethlehem is that they'll be able to move about freely. At least through the Christmas holidays.