Pilgrims flock to most peaceful Bethlehem in years

BETHLEHEM, West Bank (Reuters) - Thousands of pilgrims flocked to Bethlehem on Monday for a Christmas mass which Palestinian President Mahmoud Abbas and Western powers hope will highlight the benefits of peacemaking.

Christmas carols played through a packed Manger Square and thousands of foreign tourists and Palestinians crowded into the Church of the Nativity for a midnight mass at the spot revered as the birthplace of Jesus.

It was the most peaceful -- and profitable -- Christmas for Bethlehem in years and local officials say tourist numbers are the best since before a Palestinian uprising erupted in 2000.

Abbas, who relaunched peace talks with Israeli Prime Minister Ehud Olmert at a U.S.-hosted conference last month, voiced hope for the year ahead and said Palestinians would be praying for a state of their own.

"The new year, God willing, will be a year of security and economic stability," Abbas, who later attended the mass, said in Bethlehem. "We pray next year will be the year of independence for the Palestinian people."

Abbas and Olmert have vowed to try to reach a statehood agreement by the end of 2008.

Before the festivities, Palestinian security forces, many carrying newly issued rifles, took up positions on the streets of Bethlehem in numbers not seen in years.

Some tourists said the guns made them nervous, but were excited to be celebrating Christmas in the Holy Land.

"Despite all the security, people couldn't be more friendly," said Eaddy Kiernan, 22, on holiday from the United States, of the large number of armed guards. "It's the most special place you could celebrate Christmas."

NO ROOM AT THE INN

Bethlehem was hard hit when tourism slumped during the early years of the Palestinian uprising, or Intifada.

Most residents still cannot work in Jerusalem or travel freely to other Palestinian towns because of Israeli restrictions and a barrier which cuts into West Bank land that Palestinians want for their state.

Israel says the barrier, made up of wire fence and concrete walls, is meant to keep out suicide bombers. Israel allowed dozens of Christians from Gaza to travel to Bethlehem to take part in the festivities.

This year store owners say a pick-up in tourism has brought them the merriest Christmas in seven years.

"This year is better than other years because this peace process is making people feel more calm," said Nadia Hazboun, who manages a souvenir shop opposite the Church of the Nativity.

Tourism, the lifeblood of Bethlehem's economy, has improved as Western powers seek to bolster Abbas in his power struggle with Hamas Islamists who took over the Gaza Strip in June.

After battling for years to fill rooms, many Bethlehem hotels are fully booked for Christmas.

Middle East envoy Tony Blair has been trying to improve tourist access and facilities in Bethlehem. The former British prime minister recently stayed overnight in one of the city's best hotels to send a message it is safe.

Local leaders remain cautious. Tourism numbers are still 60-70 percent of pre-Intifada levels, and many Western governments still warn their citizens against non-essential travel.

(Additional reporting by Hatiham Tamimi; Writing by Adam Entous; editing by Andrew Dobbie)