BETHLEHEM, West Bank, Dec. 19 (AP) -- No twinkling strings of colored lights. No pilgrims packing Manger Square. This Christmas is shaping up to be a forlorn affair in Bethlehem, the town of Christ's birth.

A week before Christmas, this biblical West Bank town in the hills just south of Jerusalem - celebrated in familiar holiday carols, commemorated in countless Christmas cards and school-pageant creches--has become an emblem of the hardships and sorrows of the nearly three-month-old Palestinian uprising.

Fierce gun battles rage between Palestinian snipers and Israeli machine gunners in the suburb of Beit Jalla. Bethlehem's three refugee camps boil with fury and discontent. Dozens of Palestinian stone-throwers, some as young as 8 or 9, have been hurt or killed in cat-and-mouse battles with Israeli troops guarding a fortified Jewish shrine on the edge of Bethlehem.

Not surprisingly, tourism--mainly organized through Israeli tour companies--has dried up. Most souvenir shops are tightly shuttered, and the lumbering tour buses that would normally clog the narrow streets this time of year are absent.

It is a bitter blow for Palestinians who had hoped the millennial Christmas would be the centerpiece of an ambitious economic-development plan for Bethlehem--and a jump-start for their efforts to claim a larger share of tourism dollars.

"The season has been hard hit," acknowledged Nabil Qassis, the Palestinian Cabinet minister in charge of Bethlehem 2000, the Palestinian body overseeing the development effort. "If you want to go somewhere, you go to have fun, not to be shot at."

On Monday, Manger Square--the big stone plaza fronting the Church of the Nativity, the traditional site of Christ's birth--was all but deserted. An old man in an Arab headdress hobbled slowly across the nearly empty expanse, leaning on a cane. Inside the cavernous church, the only visitors in sight were a lone Palestinian mother and child.

"Usually, there would be a wait of two or three hours to go down into the grotto"--the lamp-lit, cave-like enclosure beneath the church, where faithful believe Mary gave birth--"but now you can just walk in," said a Palestinian tourist policeman who would only give his family name, Shakarneh.

There was only one place in town where a crowd could be found: the Israeli military checkpoint on the edge of Bethlehem, manned by half a dozen edgy-looking young soldiers who stopped cars and questioned motorists while a long traffic jam backed up on either side.

For much of the past three months, Palestinian travel in and out of the West Bank, on whose edge Bethlehem lies, has been sharply restricted. In recent days, Israel has again begun allowing Palestinians to travel into Israel for their jobs, which are usually manual labor.

Last week, Israeli media reports raised the possibility that Israel could declare Bethlehem a closed military area on Christmas Eve, preventing pilgrims and tourists from entering. The army said Monday that no decision had yet been made.

Despite the grim outlook, Christmas has not been canceled outright.

A few choirs, nearly all of them local, will sing in Manger Square on Christmas Eve. The Latin Patriarchate says it will stage its traditional regalia-filled holiday procession--led by the patriarch, the top Roman Catholic cleric in the Holy Land--from Jerusalem, three miles away.

Yasser Arafat usually attends midnight Mass at the Church of the Nativity, along with a host of other dignitaries, but his plans were unclear this year. The Palestinian leader has spent much of the current outbreak of violence holed up at his headquarters in the Gaza Strip, or traveling abroad.

Bethlehem has seen some grim Christmases past. It was under Israeli military occupation for nearly three decades, and times were particularly tense during the Palestinians' 1987-92 intifada, or uprising, when annual festivities in Manger Square were watched over by Israeli army snipers on the rooftops.

But many had hoped for a better life once Palestinians gained control of the West Bank's cities and large towns, including Bethlehem. Celebrations in 1995, the first year of Palestinian rule in Bethlehem, were marked by an outpouring of nationalistic fervor and hopes for Palestinian statehood.

Hope was in short supply in Beit Jalla, a mainly Christian village abutting Bethlehem that has seen some of uprising's worst firefights. Palestinian snipers have used Beit Jalla to shoot at the Jewish Jerusalem neighborhood of Gilo across a wide ravine. In turn, the Israeli military has fired back at Beit Jalla, damaging some homes.

Issa Kissia, a 42-year-old Palestinian father of four, had his house wrecked by shellfire and lost his job in Israel when he could not travel to work.

"Every year we have presents and a Christmas tree, but this year there is no house for the tree, and no money for presents," Kissia said. "I don't know what to tell my children. This year, we do not feel that Christmas is coming."

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