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 highest 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 Christmas lights.

Merrymakers blasted horns, bands sang traditional Christmas carols in Arabic, Boy Scout marching bands performed, and Palestinian police were deployed around town to keep the peace.

Thirty tourists from Papua New Guinea, all wearing red Santa hats, walked around the Church of the Nativity, built on the site where tradition holds that Jesus was born. Church officials and Palestinian Authority President Mahmoud Abbas voiced hopes for peace.

Pat Olmsted, 64, a 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," she said. "As I read the pages, it will mean so much more to me."

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

As the fighting tapered off the last five years, attendance steadily climbed. The town's 2,750 hotel rooms were booked solid this week, and town officials said more hotels were under construction.

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

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