Jerusalem is burning. And that's the good news. Hanukka candles are giving out their light from windows in the city's Jewish neighborhoods, both mainly Orthodox and largely secular. Perhaps that is part of the Hanukka miracle. I love this holiday, not (just) for the presents nor for the fattening food: It gives so much pleasure to see the way it brings people together. Radio presenters sign off programs with a wish for a "Happy Hanukka." Candles are lit in public ceremonies. And in the spirit of giving, the mammoth "Shirutrom" - Singandonate - fund-raising campaign to improve lives of IDF soldiers is run on state TV and Army Radio without more than a pinch of cynicism. Growing up in a London suburb where the Jewish minority really was a minority, we could appreciate Hanukka but British-style, behind closed doors. Over here, it is wherever you look: There are no Christmas pantomimes but there are special shows for children from the overrated and overpriced Festigal to the alternative children's song festival; museums are running Maccabee-based activities; every shopping mall is full of festive spirit complete with children's entertainment and workshops like build your own dreidel, the traditional spinning-top toy, or hanukkia, the nine-branched candelabrum. Our neighbors' kids played Hanukka songs on their recorders as they lit candles the other night. My young son knew the words - naturally. It all seemed far removed from the days when we would so often return home from our state schools in England's green and pleasant land singing Christmas carols that my mother came up with the idea of a penny fine for every one sung in the house. The money was ceremoniously placed in the JNF's "Little Blue Box" on a shelf in the hallway. Somewhere in Israel there could be a grove of trees funded entirely by my inability to keep the night truly silent, having learned "Stille Nacht" in German and "O come all ye faithful" in a Latin form even more archaic than the English. THE GHOSTS of Christmas past don't haunt me but they definitely helped send me off to a brighter future in the Holy Land as soon as I was able. No Yuletide office parties for me. I am writing these lines with sticky fingers courtesy of a jelly doughnut provided by the Post. The closer I came to the real Bethlehem, the further I was removed from the nativity narrative. When Bethlehem Road is the place you go for a nice bagel, to buy fancy blue-and-white gifts or get the dog's vaccinations done you can forget about Xmas altogether. At an amateur performance of Peter Pan the other night by Jest (the Jerusalem English-Speaking Theater) the audience laughed appreciatively at the point when Michael Darling is urged to think nicer thoughts in order to fly: Ultimately his uplifting experience comes as he shouts out "Hanukka." MANY OF the adults in the audience had made a similar journey to mine - from a land of commercial Christmas experiences to the capital of Israel where City Hall this year erected a six-story-high hanukkia. I don't believe in fairies (sorry, Tinkerbell) but I do believe in decorating the town with what Brits call fairy lights and Americans just know as Christmas lights. With Jerusalem celebrating 40 years of reunification and Israel gearing up for its 60th anniversary, there is much to celebrate. So much it sometimes seems the whole world wants to get in on the act. This must be the least Godforsaken spot in the universe. Hanukka can be celebrated anywhere. But in Jerusalem it takes on a special dimension. The commercialism is there but the Hanukka lights are Hanukka lights, not Disney's version of what the holiday should look like mixed with a politically correct attempt to offer a holiday for all. Hanukka in Jerusalem is joyous, although this year in the back of people's minds is the talk that again the city could be divided. Gold ribbons, the sign of the public campaign calling to maintain the unity of the capital, are beginning to appear on the antennas of cars. If the talk turns into anything more serious, I suspect Jerusalem will start to look like a giant Hanukka present wrapped with more and more ribbons. IT IS A city with strings attached. A history this long - 3,000 years and counting - the home of three monotheistic religions, Jerusalem has a cherished place in the hearts and souls of millions around the world. Many of them would be surprised to see how the modern city with its cultural monuments, malls and nightspots lives alongside the ancient streets. It is a place where history occasionally trips you up like some old paving stone worn and dislodged with time. It is a city of miracles - all year round. For millennia Jews have prayed to live here. And in increasing numbers they are making that dream a reality. The ingathering of exiles continues with French virtually becoming the lingua franca in certain neighborhoods. Teddy Kollek, the city's legendary mayor, was one of the prime forces in uniting the city, rebuilding the Jewish Quarter, which had been destroyed under Jordanian rule, and acting to absorb the huge numbers of Muslim and Christian residents he suddenly found under his jurisdiction. He pledged to keep the city united as Israel's undivided capital, telling me once: "The Arabs want at least the part of Jerusalem that was under Jordanian rule to be their part of the city and build their capital there. This is a proposition which is not only unacceptable, it is unjustified. "When they had half the city, they built their capital in Amman. There are many reasons for this, among them that the Hashemite rulers felt safer there. They badly neglected Jerusalem in order to invest money in Amman, which I understand has become a presentable capital. The Arab tradition is not to build capitals in their holy cities." Jerusalem, heaven knows, has its problems. But it is also a city of hope. The social gap between the haves and have-nots; ultra-Orthodox, religious and secular; Arab and Jew all exist. Yet increasing numbers of Jerusalemites of all backgrounds are working together in the city's hi-tech ventures and businesses. The streets downtown are dirty and noisy but much of the noise and rubble comes from building projects as sidewalks are repaved, stores spruced up and facilities improved. The construction and reconstruction goes on even as the country enters the post-Annapolis phase. Over the centuries, conquerors captured Jerusalem's stones and walls but not its heart. The shadows cast over the country today by threats of terror, a nuclearizing Iran, increasing chaos in the Palestinian-controlled territories; uncertainty on the northern border and Kassams thudding into the South are real. But Jerusalem's ability to survive - and thrive - is illuminating. Modern Jerusalem is a place filled with festive cheer. Long may its light shine on.