ISRAEL is taking some of the shine off festivities in Bethlehem this year, keeping a Finnish Christmas tree from reaching the town of Jesus's birth on the grounds it could spread disease.
The Palestinian Authority has ruled the West Bank town since Israel handed it over four days before Christmas last year. But Israel held up the tree this year in Haifa port.
"The Finns donated a tree that wasn't able to get here because the Israeli authorities are blocking it from reaching Bethlehem under the pretext that the tree has some epidemic," the deputy mayor, Mr Jamal Sulleiman, said on Sunday.
Palestinians lit up a modest local tree after Israel barred the 14 metre tall Finnish fir and some 11,000 Chinese made lights from the town of 40,000 Muslims and Christians.
"There is a special disease in Finland ... that can damage trees in the whole area," said Mr Shlomo Dror, spokesman for Israel's policy chief in the West Bank and Gaza. He said an electrical problem with the lights could be solved with the help of an engineer but for now they remained held up in port.
"Greetings from Finland, the Santa Claus land," chanted a Finnish Santa, the only Christmas gift from Finland to make it to Bethlehem. He distributed sweets to children in front of Bethlehem's Church of the Nativity.
A Finnish official who attended the lighting ceremony said it was Israeli import regulations on live trees that were preventing the fir from getting past the northern Israeli port.
"It is a cut tree of course, but it is in a way live," said Jarnosy Rjala, a consul at the Finnish Embassy.
"Despite the Israeli complications for the tree and the decorations, the Christmas spirit will prevail in Bethlehem through its Palestinian people ... and particularly because it is the first anniversary for the liberation of Bethlehem," said Mr Dawoud Bishara, a Palestinian legislator from the town.
Far from the tourists and television cameras of Bethlehem's Manger Square, Palestinians are quietly celebrating Christmas with less money and hope than last year.
Decorations and bell ringing Santas are out on the streets of Ramallah, the liveliest and most westernised Palestinian town, just north of Jerusalem.
But Israeli Palestinian fighting, curfews and closures have left shoppers with little cash and poisoned the air of optimism that the extension of Palestinian self rule brought to the town last Christmas.
"This year if you go to the streets and see the faces of our people you get the message of what's going on," said an Anglican priest, the Rev Suheil Diwani.
"Christmas is different from last year because of the economic hardship and a peace process that has really stopped," he said.
Ramallah is a mixed Christian Muslim town that had begun to emerge from the dour days of intifada when Christmas was not celebrated publicly.
Restaurants and bars have been thriving since Mr Yasser Arafat, the Palestinian Authority President, returned to the West Bank and Gaza. Even night clubs have sprung up.
But a year of Israeli closures in response to Palestinian attacks and gun battles between PLO police and Israeli soldiers in the town in September have taken a toll.
Workers cannot travel to jobs ink Israel. Poverty is worsening. Israel will not give permits for anyone to travel to Jerusalem or Bethlehem. The shops display Christmas decorations and treats but few people are buying.
Mr Diwani complains that merchants themselves don't have the money to give goods for the church to distribute to the poor on Christmas Eve.
"The shopkeepers are really in a difficult situation," he said. "People are getting depressed, even a bit pessimistic."
But there was no sign of depression in Saint Joseph's school as Baba Noel the Palestinian Santa Claus hurled sweets from the roof into a courtyard packed with Christian and Muslim children.
"We will celebrate Christmas this year to forget all the fighting that has happened," said Raya Yusef (13) as youngsters in their holiday finery scoured the floor for unseen sweets, to the strains of Jingle Bells in Arabic.
Santa makes the rounds of all Christian schools in Ramallah, which educate much of West Bank elite.
"We try to keep politics out of the school, said teacher Sister Marie de l'Esperance.
The reality of the Arab Israeli conflict, however, is just outside the school gate.
"We feel Christmas in our homes and our churches more than going to the Church of the Nativity Bethlehem because it's like a military camp," said Mr Diwani.