Hundreds of people packed Manger Square in Bethlehem on Saturday for the lighting of a Christmas tree.

The tradition is usually annual but was paused for the last two years due to the Israel-Hamas war in the Gaza Strip.

The event took place just in front of the Church of the Nativity, which is built on the site where Christians believe Jesus was born.

Crowds cheered as the giant tree was illuminated.

Christmas celebrations are a crucial economic engine in Bethlehem, and many residents in the West Bank city were left reeling by the recent conflict.

Businesses shuttered and unemployment and poverty soared.

Bethlehem Mayor Maher Canawati said he hoped the return of Christmas traditions would "give people hope."

Christians make up a small minority of Palestinians and Bethlehem is one of the only cities in the West Bank and Gaza where Christmas is really felt.

Revellers and worshippers alike will pack the same square for Christmas Eve festivities later this month.

AP video by Imad Isseid