Bethlehem celebrated Christmas on Monday (December 25) with renewed calls for peace in a town, where Christians believe Jesus was born, which has been hardly hit by economic woes and Israeli travel restrictions. Worshippers flocked to the grotto of the Church of the Nativity, revered by Christians as the birthplace of Jesus, to attend Christmas mass prayers led by Michel Sabbah, the Vatican's envoy to the Holy Land. Hundreds of pilgrims gathered in Manger Square, which was decorated with coloured lights and Christmas trees. The traditional midnight mass was recited with Palestinian President Mahmoud Abbas present and Manger Square was awash with the soft sounds of hymns and church bells. Despite the festivities, many residents felt they had little to celebrate about after weeks of violence in the Palestinian territories between rival factions Fatah, which is loyal to Abbas, and Hamas, a militant group that won a parliamentary election in January. Life in Bethlehem has deteriorated as residents find it difficult to reach jobs in Jerusalem and West Bank towns like Hebron amid Israeli checkpoints and an Israeli barrier that cuts into West Bank land that Palestinians want for a state. Israel says the barrier, made up of a mix of wired fence and concrete walls, is meant to keep out suicide bombers. Western sanctions on the Hamas-led Palestinian Authority have also hit government employees, many of whom have not been paid in months. The West wants Hamas, sworn to Israel's destruction, to change its stance as the main condition for renewing aid. Israel's army eased restrictions to allow foreigners as well as Israeli and Palestinian Christians from the West Bank and Gaza to visit the town over the holiday. But tourism, the lifeblood of Bethlehem's economy, has dropped since a Palestinian uprising erupted in 2000. The average number of visitors per month has fallen to as low as 20,000 people per month from about 100,000 before the uprising. Unemployment is estimated at around 65 percent due to the economic hardships.