BETHLEHEM, Israeli-Occupied West Bank -- The flag went back up, Christmas was saved, and this town celebrated its first happy Christmas Eve in six years of glum holidays.

A row over raising the Palestinian flag had threatened to scrub the Christmas festivities at the birthplace of Jesus, but Israeli authorities yielded yesterday, and the celebration was on.

Thousands of Palestinians gathered here to watch marching bands and choirboys escort the Latin Catholic patriarch to church services, the first such public rejoicing since the Palestinian uprising began in 1987.

In the Gaza Strip, however, the grim reality of that uprising continued to be felt. Palestinian radicals ambushed an Israeli jeep, killing a top Israeli Army officer and wounding three others.

The ambush, for which the Muslim extremist group Hamas was believed responsible, drew now-predictable calls by Israeli right-wing groups to halt peace negotiations with Palestinians.

Israel Radio quoted Rafael Eitan, head of the Tsomet Party in Parliament, demanding, "How many acts of murder have to happen before the government realizes negotiations cannot be conducted with murderers?"

In Bethlehem, a large crowd of Palestinians and some Christian tourists jammed into Manger Square in hopes of witnessing a peaceful celebration. They were not disappointed, though that outcome was uncertain at moments.

Yesterday morning, Palestinian youths hoisted the Palestinian national flag in front of the municipal building and taunted Israeli authorities who have repeatedly taken it down. The head of the Israeli Civil Administration for the West Bank, Brig. Gen. Gadi Zohar, conceded defeat.

"It's history now," he said of the tug-of-war over the flag. "We are not going to fight now. This is a holiday. We are going to let all the ceremonies and festivities continue."

Israel, which has held Bethlehem under military occupation since the 1967 Mideast war, said the striped Palestinian flag could not be raised over a public building. Bethlehem officials said their right to fly the flag was secured with Israel's recognition of the Palestine Liberation Organization three months ago.

"Every nation in the world has a right to its own flag," said Bethlehem Mayor Elias Freij. "This is our flag."

The mayor had threatened to order a halt to the Christmas pageantry if the Israelis lowered the flag. He noted that thousands of smaller Palestinian flags are flying on houses throughout the West Bank since Israel and the PLO signed a peace accord Sept. 13.

Israeli authorities said there was a difference between flying flags on private homes and public buildings. They accused Mayor Freij of mixing politics with religion and staging the confrontation.

"It would have been better for everybody if it wouldn't have started," General Zohar said. "We should not try to fight with symbols and prevent the ceremonies."

"We are not making Christmas political," Mayor Freij shot back. "They are making Christmas political by imposing their military authority on Christmas Day in Bethlehem."

If the whole affair smacked of a Dr. Seuss story, it seemed fitting for the surreal setting of a Bethlehem Christmas.

The pilgrims filed past hundreds of soldiers, who lined the streets, peered through strings of Christmas lights from atop roofs and frisked everyone who entered Manger Square for weapons.

"All these soldiers and roadblocks to get here . . ." tsked Friar Francis Cotter, a Carmelite priest from Boston. "It gives an undercurrent of tension."

Teeming with people

The square itself is an open rectangle, normally filled with rumbling tourist buses. Yesterday, it was jammed with police officers, Palestinians and pushy television camera crews from around the world. Strings of fringe, like those usually seen in used-car lots, looped between the lamp posts.

On one side of the square, an Israeli police station was a bastion of blue-jacketed officers. On the other was the City Hall, marked by a large electric sign that flashed "Merry X-Mas." Upstairs, behind a door with a small plastic wreath, Mayor Freij sat with somber advisers to plot the situation.

For two days, Palestinians put up the flag only to have it taken down by Israeli authorities at night. Yesterday dawned with a flagless pole again, though the mayor said he did not know when the stripping happened. His phone was out of order.

When a Palestinian youth took the matter, and a 4- by 6-foot flag, in his hand at noon and shimmied up a flagpole, Israeli police officers rushed to apprehend the culprit. He was protected by young Palestinian men chanting slogans, and -- in the glare of worldwide television -- the police backed down.

As this happened, Palestinian Scout troops paraded through the Square to the beat of drums and the blare of bagpipes, a peculiarity of parades throughout the Middle East. The Scouts led their column with more Palestinian flags.

"This is the first time we have felt this celebration in six years," said Eida Abusada, a Bethlehem resident who brought 20 of her children and grandchildren to see the parade.

During the Palestinian "intifada," or uprising, that began in 1987, public celebrations were halted by the combination of curfews, clashes and Palestinian strikes. Bethlehem authorities decided to celebrate this year, after the accord between the PLO and Israelis brought the hope of peace.

"This is the first Christmas we are open," rejoiced Murad Murad, who was doing a brisk business in falafel sandwiches outside his restaurant. "We need peace to get the economy going here."

Protecting the patriarch

In the square, seminary students formed a corridor for the patriarch so that he might be whisked past the Islamic mosque, past the police station, past the New Tourist Shopping Center and the Palace Hotel Self Serve, and into the Basilica of the Nativity and the Church of St. Catherine, where he would attend afternoon and midnight Masses.

The patriarch, Monsignor Michel Sabbah, arrived 90 minutes late and was more mobbed than whisked. But for many, the celebration was worth the wait.

"It's wonderful," said Freeman Bandek, who lives near Bethlehem. "It's the real spirit of Christmas."

Martin Geiss, a German tourist observing the proceedings from one side of Manger Square, acknowledged that it did not seem much like Christmases at home.

"I guess that's the value of this. Everybody has to celebrate in their own way," he said.

In the Gaza Strip, an Israeli Army spokesman said Lt. Col. Meir Minz, 36, was killed in the ambush on a road built to take Jewish settlers to and from their homes. Authorities said he was the second-highest-ranking Israeli officer to be slain in the six years of the intifada. Three other soldiers were lightly wounded.

Israel Radio said Hamas, a Palestinian extremist group opposed to the Israel-PLO accord, claimed responsibility for the ambush. Hamas said it was in retaliation for the earlier slaying of a Hamas leader by Israeli troops.

In the West Bank, Jewish settlers said they were setting up at least 88 new settlements as part of their campaign to defeat the peace deal with the PLO. But the government said the new settlements would not be allowed. "Absolutely not, under no circumstances," Foreign Minister Shimon Peres told state radio.


Population: 80,000 (including nearby villages). As late as the mid-19th century, Bethlehem's population was only 2,500. Historians believe that during the time of Christ, it was a tiny village of farmers and peasants with perhaps no more than 300 inhabitants.

Religious affiliation: 60 percent Muslim Arabs; 40 percent Christian Arabs. Two decades ago those proportions were reversed; Christians lost their majority due to emigration from Bethlehem and a higher birth rate among Muslims.

History: In Genesis, Bethlehem is called Ephrat, the "land of fruit," a village of farmers and peasants. It was the birthplace of the shepherd David, who slayed Goliath and became the greatest king of ancient Israel. In Hebrew, its name means "House of Bread," in Arabic it is "House of Meat."

Economy: Tourism, handicrafts, farming, religious-affiliated hospitals, schools and charities. The municipality estimates unemployment at 40 percent; the average salary in Bethlehem is about $400 a month.

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