For the first time since the beginning of the intifada in September 2000, some shopkeepers and residents in Bethlehem expressed joy over the weekend at the number of tourists and pilgrims who have arrived in the city for Christmas.
However, others remmained pessimistic at the prospects of the city returning to its previous levels of tourism.
The Palestinian Authority said an estimated 30,000 pilgrims and tourists were expected in Bethlehem for Christmas. Hotels owners said occupancy hit more than 80 percent.
Khaled Bandak, director of the Grand Hotel, said this was one of the best years for the tourist industry.
"There has been a significant increase in the number of tourists visiting Bethlehem," he told the local Palestinian News Network agency.
"We hope that the situation will continue to improve and that peace will prevail in the region."
William Sabbat, the owner of a new restaurant, expressed satisfaction with the situation, saying business for him has been "very good" in the past few days.
"This is the first time in many years that we feel the real atmosphere of Christmas," said another local businessman. "There are many tourists in the city and you can see many people in Manger Square. The children are also out in the streets despite the rain and cold."
However, Twafiq Handal, 43, who owns a toy and knick-knack store just off of Manger Square, sounded pessimistic.
"We heard there were 18,000 tourists coming, but we don't see anyone" he said.
Before the second intifada, around one million tourists and pilgrims came to Bethlehem every year, said Majed Ishaq, who directs the marketing of Bethlehem for the Palestinian Authority. But following the takeover of the Church of the Nativity by Palestinian fighters in April 2002, that number dropped to a low of 8,000.
Despite the hopes that tourists would return in droves, those estimates seemed lost on many other merchants and tour guides.
Most people in Bethlehem are still struggling from a lack of employment, said tour guide Adnam Ayesh, 44. "Almost every day we go up to the market and sit and smoke," he said. "The people of Bethlehem depend on tourism and we are really suffering."
Inside his private meeting room, with the lights of a one-meter-tall Christmas tree flickering on and off behind him, Bethlehem Mayor Dr. Victor Bataresh tried to be optimistic, saying his city was "better, quieter, and safer" than in years past.
However even he sounded bleak when asked what the future holds for Bethlehem. "I always have to be optimistic," Bataresh said, sighing and shaking his hands with his palms up. "But it's hard to be optimistic with the checkpoints and the fence cutting us off."
Indeed, the security fence that now separates Bethlehem from Jerusalem weighed heavily on all the residents interviewed by The Jerusalem Post.
"Compared to [pre-intifada] years, there are not that many people," said one resident who works for the United Nations and asked not to be named. "The city is closed and people are afraid to come. I think the future is even more black than this."
For those tourists that came, the security fence and the checkpoint did not deter them. But they added that general fears over the security situation and, to a lesser extent, the process of going through a checkpoint, influenced others they knew who decided against making the trip.
Carin Berg, a Swede who is studying Arabic at Hebrew University, said the same rumors convinced her roommates not to come. Saying she was "not afraid of the checkpoint," Berg ventured to Bethlehem because she does not have family here with her.
"Bethlehem seemed like the place to go since I still wanted to celebrate Christmas." In contrast with the locals, the spiritual significance of being in Bethlehem on Christmas Eve was what tourists spoke of, rather than the political and economic situation.
"It's very special for us to be able to be here, in the most important place in the world on this day," said Bertens, who is Catholic.