ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

The revival of the Middle East peace process has provided new hope for a little town called Bethlehem. For the first time in years the streets of that West Bank town are full of pilgrims from all over the world.

(Soundbite of band playing)

BLOCK: Thousands of people thronged Manger Square today to watch the traditional procession of the Latin Patriarch of Jerusalem preceded by dozens of Palestinian marching bands. The streets are decorated, hotels are full, and Bethlehem's residents hope for a good year.

NPR's Linda Gradstein reports from Bethlehem.

LINDA GRADSTEIN: Katherine Kukuli(ph) comes to Manger Square every year from the neighboring town of Beit Sahur to watch the marching bands and see the patriarch enter the Church of the Nativity, the traditional birthplace of Jesus. This year, under a clear blue sky, she smiles at the crowd. Some of the children dressed in red velvet Santa suits.

Ms. KATHERINE KUKULI (Student, Bethlehem University): I feel that the situation in Bethlehem area is much better than the last years because we didn't have curfews since, like, four years, and this is good. They're trying to improve everything in Bethlehem to become a better city and so.

GRADSTEIN: Katherine's a student at Bethlehem University. She says this year is also special because she's gotten a month-long Israeli permit to visit Jerusalem for the first time since she was a little girl. She says she hopes to see the Christian sites in the old city.

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GRADSTEIN: Inside the church, two Armenian priests chant the daily liturgy, a long line of tourist waits patiently to descend into the grotto and kiss the five-pointed star that marks the spot where Jesus was born.

Danish tourist Margaret Yiensin(ph) has come to Bethlehem with her two daughters.

Ms. MARGARET YIENSIN (Danish Tourist): I know the Bible, and I would like to see the place where Jesus is born.

GRADSTEIN: She says the large crowds of pilgrims made her feel connected to the Bible.

Mayor Victor Batarseh says he hopes that 65,000 tourists will spend Christmas in Bethlehem this year, more than double last year's total. He credits an intensive marketing campaign in Europe for the tourist's boom.

Mayor VICTOR BATARSEH (Bethlehem, Israel): We did the all day of selling Bethlehem as a pilgrimage center, selling Bethlehem is safe, selling Bethlehem being - having good hotels, excellent restaurants and much cheaper than Jerusalem.

GRADSTEIN: So far this year about 340,000 tourists crossed from Israel into Bethlehem. Tourism officials say Israel expects 2.3 million tourists to visit this year, the closest Israel has come to the peak year of 2000 when 2.7 million came.

Violence is down significantly, and in the past year, there was only suicide bombing in all of Israel. Israeli officials say they're working together with Palestinian security agencies to make it easier for tourists to cross the large Israeli checkpoint at the entrance to Bethlehem. Palestinian police are deployed on every street corner in Bethlehem this year, directing traffic and helping tourists find their way to Manger Square.

Despite the influx of tourists, Palestinians say life in Bethlehem remains difficult. The controversial barrier that Israel is building in and around the West Bank seals off the town from three sides. With the local economy largely stagnant, Christians throughout the West Bank continued to emigrate. Today, only about 15 percent of Bethlehem's population is Christian.

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GRADSTEIN: As church bells pill in the distance, Mayor Batarseh says Christmas is a time to focus on the history of Bethlehem.

Mayor BATARSEH: I welcome every one of you to this holy city, the city of the nativity where Jesus - our Lord Jesus Christ was born. The city always sends a message of love and peace to all the world.

GRADSTEIN: Linda Gradstein, NPR News, Bethlehem. Transcript provided by NPR, Copyright NPR.