Bethlehem, West Bank ? Islamic militants may be in charge, but that doesn’t mean there won’t be Christmas this year.

The cash-strapped Hamas government is promising $50,000 to dress up Jesus’ traditional birthplace for the holiday, more than twice the amount spent in previous years.

Yet even the extra cash – if Hamas pays up – may not be enough to bring Christmas cheer to Bethlehem, hit hard by the last six years of Israeli-Palestinian fighting.

The biblical town is now walled in by Israel’s West Bank separation barrier, poverty is deepening and Christians are leaving Bethlehem in droves.

Palestinian Tourism Minister Joudeh Morkos has modest expectations.

Last year, only about 2,500 foreign visitors came on Christmas. Before the outbreak of the Palestinian uprising in 2000, Bethlehem drew more than 90,000 pilgrims a month.

With just two weeks until Christmas, Bethlehem is only sparsely decorated.

Bethlehem Mayor Victor Batarseh, a churchgoing Catholic from a leftist party, says he will not start decorating until he has the money in hand.

A few neon stars are nailed to storefronts on the main streets. The only decoration on the Lutheran Christmas Church in a busy market area is spray-painted graffiti below the pointed steeple that reads “Islamic Jihad” – a Muslim militant group.

Economic hardship

In Manger Square, next to the Church of the Nativity built over Jesus’ traditional birthplace, only two of six souvenir shops and a small cafe were open on a recent afternoon. Many other nearby shops were closed as well. A few tourists who sat outside a cafe, braving the dreary weather, were thronged by peddlers trying to sell olive wood crucifixes.

Abir Karram, who sells traditional hand-embroidered Palestinian dresses, can no longer afford to pay the $115 monthly rent for her workshop. Two years ago, she had 30 women working part time for her, designing and embroidering gowns using ancient patterns. Now she has no workers.

Karram and other merchants say six years of economic hardship during the violence, including Israeli travel bans, have been compounded by an international economic boycott of the government imposed 10 months ago when Hamas came to power.

A Greek Orthodox monk and another worshipper pray next to the Grotto of the Church of Nativity, traditionally believed to be the birthplace of Jesus, in Bethlehem. The ruling Palestinian Hamas party has promised to pay 0,000 for the town's Christmas decorations.

“The wall stopped tourists and Arabs from Israel,” she said, referring to the separation barrier, which is meant to stop Palestinian suicide bombings but also cuts across Bethlehem’s main trade artery.

“Now people here have no salaries. It’s like a well that finished drawing water,” she said.

Christians leaving

The economic squeeze has driven away growing numbers of Christians, already a minority of 35 percent in this town of 30,000.

Mike Salman, a Bethlehem resident and amateur chronicler of Christian affairs, said about 20 percent of the town’s 1,000 Catholic families have left in the past six years.

A 2004 U.N. report estimated about 10 percent of Christians had left.

Amal Bandak, 39, a Christian, said her family of five wants to return to Chile, their home until two years ago. The Bandaks had come back to Bethlehem because her husband needed a back operation, more affordable in the West Bank.

“I used to tell the children of all the wonderful things that happen here at Christmas, how everybody comes to town, the family visits,” she said. “But last Christmas, they went to sleep weeping. They said it was the saddest Christmas they ever had. It broke my heart.”

Hamas’ generous promise of funding has drawn mixed reactions among local Christians.

Some said they suspect the Islamic militants hoped to score a few points with the international community.

Salman, a Palestinian Catholic, said Hamas should have given the money to the poor, but it was a sign of goodwill.

Last year, the outgoing government run by Hamas’ archrival, Fatah, did not give Bethlehem any money.

“As a Palestinian government, we hope our Christian brothers have a happy celebration,” said the acting finance minister, Samir Abu Eisha. “They are an integral part of Palestinian society.”