The giant tree, topped with a bright red star, was lit up with hundreds of coloured lights as red, white and green fireworks illuminated the night sky.
"It is very joyful, a very nice evening. The air is full of hope, full of joy, full of expectation," said Maria, a tourist from Finland.
Tourists and pilgrims usually overrun the Palestinian city in the Israeli-occupied West Bank in December, visiting a number of the city’s holy sites including the Church of Nativity, built upon the place many Christians believe Jesus was born.
But, a year after Covid-19 forced the biblical site to close its doors for the first festive period in living memory, many hoped that the new Omicron coronavirus variant will not ruin another holiday season in the town believed to be the birthplace of Jesus.
Bethlehem Mayor Anton Salman said travel restrictions had already prevented several foreign delegations from attending and the city was still dealing with the economic hit from the long lockdowns.
“Unemployment increased by a lot. Our only way and our only choice is to focus on Bethlehem again and to encourage people to come and visit the city,” Mayor Salman said.
People at the market, open this year for 10 days, hoped that it would draw visitors and showcase Palestinian crafts.
“It is very important after the pandemic to make people come back to normal life, to enjoy the season,” Rola Sarras, who joined the throngs at the craft market, said. “It is very important that we are reactivating the street by showing the people the provision of the Palestinians in Bethlehem and the kind of crafts we produce.”
Israel has already brought in new rules to shut out foreign visitors for 14 days to try to prevent the spread of Omicron but hopes that the ban will be lifted in time for Christmas travel.
In its last pre-pandemic winter, in 2019/20, Bethlehem hosted 3.5 million visitors.