With a rich political and religious history, the most obvious aspect being the birthplace of Jesus, Bethlehem is perched at the very end of the desert 10 kilometers north of Jerusalem. Home to the Church of the Nativity, a main attraction for Christian pilgrims from all over the world, the city has a sizable Christian community, although the majority of the population today is Muslim.

STAGNANT ECONOMY

In spite of a high literacy rate of 84 percent, the city has experience economic stagnation due to a steep decline in tourism, its major industry. Extended curfews during the second intifada, restricted movement of goods and limited issuance of permits have limited residents employment opportunities. The growing presence of Israeli settlements coupled with the Wall are isolating Bethlehem from the rest of the occupied West Bank and Jerusalem. (Under the British Mandate, Bethlehem and Jerusalem were considered one region.)

Bethlehemzzz*zs isolation is leading to the gradual disappearance of the Christian middle class that form its economic backbone. In 1947, about 75 percent of the population was Christian. Today, that number is down to about 20 percent. Between the years 2000 and 2004, it is estimated that approximately 3,000 Christian residents left the city.

DEMOGRAPHIC CHANGE

The changing demographics of the city are closely connected to a decline in tourism. For instance, fewer visitors has led to the shutting down of cottage industries that produce souvenirs and handicrafts, and a loss of jobs for wage workers in the hospitality industry.

There seems to have been a slow revival in tourism over the past couple of years due to relative stability since 2006. The municipality reports that over 1.2 million visitors were in Bethlehem in 2008. However, it should be noted that a majority of these tourists visit during the Christmas season, with the remainder of the year experiencing economic lull in the absence of any other major industries.