Instead of the hoped for crowd of thousands expected to arrive for the millennial Christmas, only a few die-hard pilgrims came to sing carols and attend religious services, reports CBS News Correspondent David Hawkins.
Bethlehem, in the hills of the West Bank about three miles south of Jerusalem, has been the scene of fierce fighting during 13 weeks of clashes. The fighting has taken at least 345 lives, nearly all Palestinian.
The city cancelled all but a few non-religious events out of respect for those killed. Instead of lights and decorations, Christmas trees were adorned with the pictures of Palestinian dead.
At midnight mass, the Latin Patriarch of Jerusalem, Michel Sabbah, noted sadly that the message of peace had fallen on deaf ears in the Holy Land. He also sounded a defiant note.
"Whether we live at war, or in the intefadeh, whether our houses are demolished, our brothers wounded or killed, it is here that God wants us to be Christians," Sabbah, the highest-ranking Roman Catholic cleric in the Holy Land and the first Palestinian to hold the post, said. "This is our land, to claim our freedom among our demolished houses and in our besieged towns and villages."
Palestinian President Yasser Arafat attended the service, his first visit to the West Bank since the conflict began. Arafat said Monday he would study a new U.S. peace proposal, issued over the weekend to negotiators from both sides.
The American plan reportedly calls for Palestinian control of 95 percent of the West Bank and sovereignty over Arab neighborhoods in Jerusalem, including most of the Old City.
Palestinian refugees would be permitted to return to their "homeland," but almost all of them would be resettled in the new Palestinian state.
Israel would annex most Jewish settlements in the West Bank and maintain sovereignty over the Old City's Jewish Quarter, including the Western Wall.
Israeli Prime Minister Ehud Barak said any final agreement has to insure the security of Israel and the future of Israeli children.
"We must do everything possible to make that happen," he said.
But neither Barak nor Arafat has much time. The Americans want an answer by Wednesday on whether a new round of talks aimed at finalizing such a deal is warranted.
At the start of this year, Palestinians were looking to Christmas 2000 as the centerpiece of what they hoped would be a millennial boom. Instead, tourism has dried up almost completely, with only a few pilgrims braving the outbreak of unrest in the West Bank and Gaza Strip called by Palestinians a second intefadeh, after the 1987-1993 uprising.
Visitors had to pass through three military roadblocks two Israeli and one Palestinian tenter Bethlehem. Israel eased restrictions to permit Christians to come to Bethlehem.
Israel has a small number of citizens who are Christians, and virtually all are Arab. Since the violence began, Israel has prevented its citizens from traveling through Palestinian areas for safety reasons.
A group of Palestinian school children danced on a sprawling stage built for this year's millennium celebrations a marked contrast to the international collection of choirs who gathered at the same site in past Christmases.
Saying he was trying to get into the holiday spirit, 17-year-old Palestinian Majid Koklay decided to wear red pants and a red Santa Claus-style cap to the procession. "I thought I would try to have a little fun but it's still sad. I have friends and classmates who have been hurt or lost their homes," said Koklay as joined the crowd of several hundred in Manger Square.
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