Tens of thousands of visitors are expected to gather in Bethlehem for a Christmas procession, after the town’s economy was badly hit by lockdowns.
Two years of muted celebrations have given way to bustling streets, but numbers have not matched 2019’s record.
Palestinian Christians and pilgrims will later attend midnight Mass at the 4th-Century Nativity Church.
Festivities follow a deadly escalation of violence in the occupied West Bank and Israel.
Scout bands playing bagpipes and drummers escorting church leaders entered Manger Square after making their way from Jerusalem, ahead of midnight Mass at the nearby Church of the Nativity – which is built on the site where Jesus Christ is believed to have been born.
The grotto inside the church is the oldest site continuously used as a place of worship in Christianity.
Accompanying Palestinian Christians from as far away as Galilee and the Gaza Strip, there are visitors from around the world.
Although numbers are still lower than the record level seen in 2019, the streets are bustling and just as in the Nativity story, there is not a room to be found, with local hotels fully booked.
While businesspeople here are optimistic about an economic recovery, there is also concern about the impact of a recent increase in violence between Israelis and Palestinians and how the policies of the incoming far-right Israeli government could increase tensions.
The new government, considered the most right-wing in Israel’s history, sees Benjamin Netanyahu’s return to a historic sixth term in power.
Earlier this month, Israel said its forces unintentionally killed a 16-year-old Palestinian girl during a gun battle with militants in the occupied West Bank.
In November, five Palestinian men were killed by Israeli forces in four separate incidents in the occupied West Bank, Palestinian and Israeli officials said.
