BETHLEHEM, West Bank -- The town where Christmas began welcomed it with true joy last night, giddy with its first small taste of freedom.
Muslims and Christians alike danced in Manger Square and whooped at the fireworks marking Bethlehem's first Christmas in 28 years that has not been held under the guns of the Israeli army.
Israel had withdrawn its soldiers to the outskirts of the city Thursday under the Israeli-Palestinian peace accord.
"Christmas is a time of peace and brotherhood, and this is the true spirit of Christmas," said 33-year-old Yusef Hadid, watching the festivities that brought thousands of Palestinians into the streets.
Yasser Arafat attended, but the leader of the Palestine Liberation Organization remained out of sight most of the day, apparently in recognition of Christian grumbling that he might overshadow the religious events.
Jewish right-wing protesters also tried to come to Bethlehem but were blocked at the outskirts of the city by an overwhelming show of Israeli army and police forces.
Christian dignitaries, led by the Latin Catholic patriarch, Michel Sabah, presided over the traditional processional to St. Catherine Church, next to the site customarily said to have been the birthplace of Jesus.
In past years, Israeli soldiers have guarded that processional and stood watch over the entrances to the church.
"When I tried to come before, soldiers always stopped us," said an elderly Palestinian who gave his name as Abu Fuad. "They said we did not have the papers, or they gave no reason. It was very hard to come to the church."
This year, the biggest problem was the traffic jams, which clogged Bethlehem's streets despite the presence of newly arrived Palestinian police in smart blue uniforms.
Suha Arafat, the wife of the Palestinian chief, caused more congestion when she forayed into public. Mrs. Arafat, who was born a Christian but converted to Islam when she married Mr. Arafat, nevertheless took her infant baby to a Protestant church.
The transfer of authority in Bethlehem did seem to keep away the usual large number of Western pilgrims. In a grotto in the nearby Shepherds' Field, where biblical tradition says shepherds received the news of Jesus' birth from an angel, a tour guide, Gabriel Khano, watched a group of Indonesian pilgrims recite prayers.
"Usually, we get Americans and Europeans," he said of his Christmas Eve tour packages. "This year, we got only tourists from the East. They are a lot less political. These Christians are not as pro-Israel, pro-Zionist as the Christians in America, so they didn't worry that the Israeli army left."
The tourists who did venture to Bethlehem seemed bewildered by the scene. The drumbeat of Arabic music, the smoke of cooking shwarma, the fireworks overhead and the jangling cups of strolling vendors selling tea bore little resemblance to the Western image of Christmas.
"Well, it sure isn't what I expected," acknowledged a visitor from New Zealand, Amy Worthman. "I came to see Christmas Eve, and it looks more like a circus party."
She cast a wary eye at the young men who were riding on the shoulders of other friends, swaying precariously to the music. Many of these celebrants were the "shebab" -- the youths -- who led the eight-year Palestinian "intifada" that is thought to have helped propel Israel to the peace table.
"I spent five months in prison," said Adnan Khalil Ali, a 25-year-old Muslim. "I was blindfolded, beaten and slapped. I'm out here celebrating because this is the first year I don't see Israeli soldiers."
One did not need to go far to see Israeli soldiers, however. The peace agreement with the Palestinians allows Israel to keep control of access to Rachel's Tomb in Bethlehem, and Israeli jeeps patrol part of the main road to the tomb.
Benjamin Netanyahu, the hard-line Israeli opposition leader, called for a rally last night at the tomb to protest Israel's withdrawal from Bethlehem. But security forces stopped the protesters on the road from Jerusalem.
Mr. Arafat had originally intended to arrive in Bethlehem on Christmas Eve. But Christians in Bethlehem complained that his arrival would make it a political event, not a religious one. He moved up his arrival to Saturday and was greeted enthusiastically by thousands who listened to him speak Saturday afternoon.