BETHLEHEM, West Bank — The traditional birthplace of Jesus is celebrating its merriest Christmas in years, as tens of thousands of tourists thronged Bethlehem on Friday for the annual holiday festivities in this biblical West Bank town.

Officials said the turnout was shaping up to be the largest since 2000. Unseasonably mild weather, a virtual halt in Israeli-Palestinian violence and a burgeoning economic revival in the West Bank all added to the holiday cheer.

By nightfall, a packed Manger Square was awash in red, blue, green and yellow Christmas lights.

Merrymakers blasted horns, bands sang traditional Christmas carols in Arabic, boy scout marching bands performed and Palestinian policemen deployed around the town to keep the peace.

A group of 30 tourists from Papua New Guinea, all wearing red Santa hats, walked around the nearby Church of the Nativity, built on the site where tradition holds Jesus was born. Both church officials and the Palestinian president voiced hopes for peace.

Pat Olmsted, a 64-year-old teacher from Sugar Land, Texas, was celebrating her first Christmas in Bethlehem and broke into tears as she stood in Manger Square. "It just gives me a whole true meaning of the Bible. As I read the pages, it will mean so much more to me," she said.

Bethlehem used to attract tens of thousands of tourists from around the world for Christmas celebrations, but attendance dropped sharply following the outbreak of the second Palestinian uprising in 2000.

As the fighting tapered off over the last five years, attendance steadily climbed. The town’s 2,750 hotel rooms were booked solid for Christmas week, and town officials say more hotels are under construction.

Israeli officials have said they expect about 90,000 visitors in Bethlehem during the current two-week holiday season, up from 70,000 last year.

But the bloodshed has left its mark. Visitors entering the town must cross through a massive metal gate in the separation barrier Israel built between Jerusalem and Bethlehem during a wave of Palestinian attacks last decade.

The Roman Catholic Church’s top clergyman in the Holy Land, Latin Patriarch Fouad Twal, crossed through the gate in a traditional midday procession from Jerusalem. Later, he celebrated Midnight Mass, the peak of the holiday’s events in town.

In his homily, Twal issued a conciliatory call for peace between religions and urged an "intensification" of dialogue with Jews and Muslims.

"We need to unite and integrate the many values we have in common: prayer, piety, fasting, almsgiving, and ethical values," he said.

"Our hope for Christmas is that Jerusalem not only become the capital of two nations, but also a model for the world, of harmony and coexistence of the three monotheistic religions," he added. "During this Christmas season, may the sound of the bells of our churches drown the noise of weapons in our wounded Middle East, calling all men to peace and the joy."

The crowds continued to swell throughout the day. By Friday night, Israeli military officials, who coordinate movement in and out of the West Bank, said the number rose to some 70,000 people on Christmas Eve alone, compared with 50,000 last year.

Raed Arafat, the 40-year-old owner of the Stars and Bucks Cafe, played Christmas songs over loudspeakers and handed out free Arabic coffee at his shop near Manger Square. Tourists snapped photos and bought mugs emblazoned with the cafe chain’s green logo, modeled after the American Starbucks company.

"There are more people this year," an ecstatic Arafat said. "Christmas this year is not like every year because now there is more quiet."

The holiday had its surreal moments. Many visitors were local Palestinians, including a large number of Muslim women whose faces were covered by veils. The loud Muslim call to prayer from a mosque next to Manger Square briefly drowned out the celebrations.

"Because of the hard situation and the pressure we are living in, we take advantage of any joyful moment and bring our children to play," said Khitam Harazallah, a veiled Muslim housewife from the nearby Deheishe refugee camp who came with her two young children.

Today, just one-third of Bethlehem’s 50,000 residents are Christian, down from about 75 percent in the 1950s. The rest are Muslims.

The Christian population throughout the Middle East has shrunk in recent decades as people flee violence or search for better opportunities abroad. Christians make up roughly 2 percent of the population in the Holy Land.

With the end of fighting, the West Bank has undergone an economic revival in recent years, illustrated by new shopping malls and widespread construction projects in the bustling city of Ramallah.

But a deadlock in Mideast peace talks between Israel and the West Bank government of Palestinian President Mahmoud Abbas, along with a flare-up in violence between Israel and militants in the Gaza Strip, threatened to cast a pall over the celebrations.

Abbas, a Muslim, traveled to Bethlehem to greet the revelers, saying he hoped the coming year will finally bring peace. He also said the Palestinians were issuing a special postage stamp honoring Bethlehem.

"We are seekers of peace in the path of Jesus," he said. "We hope that next year will be a year of peace by establishing the independent Palestinian state with Jerusalem as its capital, living side by side with Israel in peace and security."

Israel maintains an embargo on Gaza, which is governed by Abbas’ rival, the Islamic militant group Hamas. In a goodwill gesture, Israel allowed 500 members of Gaza’s tiny Christian community to travel to Bethlehem.

Niveen Wadia, a 40-year-old Gaza woman, said coming to Bethlehem was "a very beautiful feeling."

"In Gaza we don’t have any celebration atmosphere. We are the minority there," she said.

Dampening the holiday cheer, Israeli authorities said three Italian pilgrims were killed Friday afternoon when their car crashed into an electric pole near the Sea of Galilee in northern Israel. Two other women in the car were hospitalized. Israeli officials said the women were in the Holy Land to celebrate Christmas.