The Nativity Store in Manger Square has sold handmade olive wood carvings and religious items to people visiting the traditional birthplace of Jesus since 1927. But as Bethlehem prepares to mark its second Christmas under the shadow of the war in Gaza, there are almost no tourists, leaving the Nativity Store and other businesses unsure of how much longer they can hold on.

For the second straight year, Bethlehem’s Christmas celebrations will be sombre and muted, in deference to ongoing war in Gaza. There will be no giant Christmas tree in Manger Square, no raucous scout marching bands, no public lights twinkling and very few public decorations or displays.

“Last year before Christmas, we had more hope, but now again we are close to Christmas and we don’t have anything,” said Rony Tabash, the third-generation owner of Nativity Store.

Israel’s war against Hamas has been raging for nearly 15 months, and there still is no end in sight. Repeated ceasefire efforts have stalled.

Since the war began, tourism to Israel and the Israeli-occupied West Bank has plummeted. And after Israel barred entry to most of the 150,000 Palestinians in the West Bank who had jobs in Israel, the Palestinian economy contracted by 25 per cent in the past year.

The yearly Christmas celebrations in Bethlehem — shared among Armenian, Catholic and Orthodox denominations — are usually major boons for the city, where tourism accounts for 70 per cent of its income. But the streets are empty this season.

Tabash said he continues to open the store every day, but often an entire week will go by without a sale. Tabash works with more than 25 local families who create hand-carved religious items out of the region’s storied olive wood. But with no buyers, work has dried up for these families.

The number of visitors to the city plunged from a pre-Covid high of around 2 million visitors per year in 2019 to fewer than 100,000 visitors in 2024, said Jiries Qumsiyeh, the spokesperson for the Palestinian tourism ministry.